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A   GROUP    OF   CO-OPKRATORS. 

1.  Thk  At  thou.     2.  CKOHOK  l)K\\  llllisT.   Arliiifjtoii  (o-oiM'iat ivo  Asso- 
ciation.    3.    H.  <".   LiVEU.MoliK,  Jolinson   Comity  (Kiiiisas)  Co- 
operative Association.     4.  .1.  S.  RtxJKItS,  Texas  C<)-oi)eiHtive 
Assu<;iatioii.     .5.  '/..  I'.  MATTHEWS,  Haniinonton  Fniit 
Growers'  I'liion  and  Co-operative  Society. 


HOW  TO  COOPERATE. 


THE  FULL  FRUITS  OF  LABOR  TO  PRODUCER, 
HONEST  VALUE   TO    CONSUMER,  JUST 
RETURN  TO  CAPITAL,  PROS- 
PERITY TO  ALL. 


A  MANUAL  FOR  COOPERATORS. 


HERBERT    MYRICK 


NEW    YORK: 

ORANGE    JUDD     COMPANY, 
18  91. 


Copyright,  1891,  by 
All  Rights  Reserved. 


NOTE   TO   THE  READER. 

K  this  book  does  not  tell  you  plainly  just  how  to  co-operate  in  the  line  you 
desire,  the  Author  will,  upon  request,  try  to  give  you  the  precise  information  you 
want  if  you  will  aslc  for  it  in  definite  questions.  He  will  also  be  glad  to  assist  the 
co-operative  movement  in  any  feasible  manner.  It  will  be  a  favor  if  all  efforts  of 
this  kind,  now  existing  or  hereafter  established,  be  promptly  reported  to  him. 
The  Author  may  be  addressed  at  Springfield,  Mass. ;  or  52  Lafayette  Place,  New 
york  City;  or  504  The  Rookery,  Chicago,  HI, 


CONTENTS. 


Pages. 
PREFACE 7-9 

CHAPTER  I.    WHAT  Co-operation  Is  and  Is  Not 9-23 

CHAPTER  II.    The  History  of  Co-operation 23-36 

CHAPTER  III.    The  Co-operative  Store 36-83 

CHAPTER  IV.    Further  Examples  of  Co-operative  Distri- 
bution.   How  TO  Start  A  Store 83-127 

CHAPTER  V.    Co-operative  Production 127-143 

CHAPTER  VI.     CO-OPERATIVE  DAIRYING 143-159 

CHAPTER  VII.     CO-OPERATIVE  FIRE  INSURANCE 159-178 

CHAPTER  VIII.     CO-OPERATIVE  BANKING 178-207 

CHAPTER  IX.     FARMERS'  AND  PEOPLE'S  EXCHANGES 207-241 

CHAPTER  X.     WOMEN'S  EXCHANGES  AND  HOW  THEY  MAY  BB 

Run 241-252 

CHAPTER  XI.    THE  FUTURE  OP  CO-OPERATION 252-254 

APPENDIX:  1.  WORKING  BY-LAWS  AND  MODEL  RULES.  2.  DESCRIP- 
tive directory  of  all  classes  of  co-operative  enterprises. 
3.  Laws  Relative  to  Co-operation.  4.  Bibliography  of  Co- 
operation.  5.  Advertisements 266-346 


ACKNOWLEDGMENT. 

Tbe  Author  is  under  obligations  to  most  of  tlie  gentlemen  men- 
tioned In  connection  witli  the  cooperative  enterprises  referred  to  in 
the  following  pages.  Tliey  and  many  others  have  greatly  assisted  in 
the  preparation  of  this  worlc.  The  Author's  most  grateful  thanks  are 
cordially  extended  to  each  and  all. 


LIST  OF  ILLUSTRATIONS. 

_  Page. 

Frontispiece — A  Group  of  Cocperators. 

Fig.  1.    Central  Store  of  the  English  Wholesale  CoSperative  Society    28 
Fig.  2.    Store  and   Block  of  the   Lisbon  Falls  (Maine)  Coopera- 
tive Association 34 

Fig.  3.    Arlington's  Humble  Beginning 38 

Fig.  4.    Central  Store,  Arlington  Cooperative  Association 63 

Fig.  5.    Branch  No.  1,  Arlington  Cooperative  Association 66 

Fig.  6.    Branch  No.  2,  Arlington  Cooperative  Association 63 

Fig.  7.    Arlington's  Coal  and  Wood  Yard 66 

Fig.  8.    Headquarters  of  the  Lyons  Cooperative  Association 85 

Fig.  9.    Thomas  H.  Angell,  Manager  of  the  Lyons  Cooperative  As- 
sociation    100 

Fig.  10.    New  Store  of  the  Allegan  County  Cooperators 108 

Fig.  11.    A.  Stegeman,  Manager  Allegan  Association 112 

Fig.  12.    Central  Store,  Johnson  County  Cooperative  Association 119 

Fig.  13.    Stores  and  Warehouse  of  the  Texas  Association 124 

Fig.  14.    A  Cheap  Warehouse  for  Farmer  Cooperators 129 

Fig.  15.  (a)    Interior  View  of  Fig.  14— Cooperative  Marketing 132 

Fig.  15  (b).    Eneas  Cash,  Secretary  of  the  Lyons  Copoerative  Asso- 
ciation    139 

Fig.  16.    Elevation  of  a  Model  Cream  Gathering  Butter  Factory 146 

Fig.  17.    Plan  of  Work  Room  in  Cream  Gathering  Factory 149 

Fig.  18.    Elevation  of  a  Cheese  Factory 152 

Fig.  19.    Ground  Plan  of  Cheese  Factory 154 

Fig.  20.    Second  Story  of  Cheese  Factory 156 

Fig.  21.    Elevation  of  a  Whole  Milk  Receiving  Creamery 167 

Fig.  22.    Floor  Plan  of  Whole  Milk  Creamery 172 

Fig.  23.    The  Striking  Advantages  of  Cooperative  Savings 187 

Fig.  24.    Typical  Seal  of  a  Successful  Farmers'  Bank 195 

Fig.  25.    Edwin   Snyder,  Live   Stock  Agent   Kansas  Alliance  Ex- 
change company 208 

Fig.  26.    Marketing  the  Peach  Crop  Cooperatively 212 

Fig.  27.    Loading  Peaches  at  the  Delaware  Fruit  Exchange —  216 

Fig.  28.    A  Cooperative  Evaporating  Factory 218 

Fig.  29.    Eli  Titus,  Manager  American  Live  Stock  Commission  Com- 
pany  223 

Fig.  30.    Front  View  of  the  Hammonton  Cooperative  Store  and  Fruit 

Exchange 228 

Fig.  31.    Plan  of  First  Floor  of  the  Hammonton  Store 231 

Fig.  32.    Arrangement  of  Second  Floor,  Hammonton 231 

Fig.  33.    Shipping  Department  of  the  Hammonton  Fruit  Union 235 

6 


PREFACE 


The  True  Way  Out  of  the  evils  that  now  afflict  both 
producers  and  consumers  is  through  an  agency  that 
already  exists.  It  is  right  at  hand.  Its  ways  are  the 
methods  of  peace.  This  agency  requires  no  favored 
legislation,  no  political  revolution,  no  social  overthrow. 
It  builds  up  instead  of  tearing  down.  Yet  its  success 
has  been  abundantly  demonstrated  under  the  most  ad- 
verse circumstances.  It  is  as  permanent  as  a  human 
institution  may  be.  It  supplies  its  own  capital,  insures 
its  own  prosperity,  and  increases  in  practical  beneficence 
with  age.  Thoroughly  Christian  in  nature  and  applica- 
tion, no  phase  of  belief  can  take  exceptions  to  it.  Nor 
does  it  antagonize  the  reforms  in  politics  and  govern- 
ment and  taxation,  in  land  or  finance  or  transportation, 
that  are  now  so  prominent  in  the  public  mind. 

In  one  sense  independent  of  all  these,  in  another  view 
it  is  indispensable  to  any  reform  that  is  to  be  of  lasting 
benefit  to  the  whole  community.  Yet  it  is  intensely 
practical,  perfectly  adapted  to  country,  town  or  city, 
within  the  reach  of  all  grades  of  people,  and  thoroughly 
suited  to  the  varied  needs  and  capacities  of  producers 
and  consumers  in  all  the  great  vocations  of  life.  More- 
over, it  interferes  with  no  reasonable  effort  to  ameliorate 
the  conditions  of  society,  but  extends  to  such  the  hand 
of  fellowship.  Above  all,  it  in  no  possible  way  antago- 
nizes any  farmers' secret  .orders  or  open  organizations, 
and  in  no  manner  interferes  with  trade  unions  or  labor 
7 


8  PREFACE. 

associatioDB.  Yet  it  is  an  agency  through  which  all 
such  orders,  organizations,  unions  and  associations  may 
immensely  stimulate  and  perpetuate  their  usefulness. 

The  true  way  out  is  summed  up  in  the  one  word — 
Cooperation. 

The  present  great  farmers'  movement,  and  the  phe- 
nomenal activity  among  all  industrialists,  will  be  fruit- 
ful in  results  of  permanent  benefit  according  to  the 
degree  in  which,  without  neglecting  its  specific  objects, 
it  embraces  the  principles  of  true  cooperation.  This 
movement  must  substitute  cooperation  for  competition, 
thus  reforming  distribution  and  giving  to  the  producer 
the  full  fruits  of  his  labor,  to  the  consumer  honest  value 
for  money  paid,  and  to  capital  an  equitable  return  for 
its  use  and  risks. 

This  manual  is  written  to  facilitate  such  a  result. 
Primarily  designed  for  farmers — producers  and  con- 
sumers in  country  districts — the  wants  of  the  toiling 
masses  in  town  and  city,  factory,  store  and  mine,  have 
also  been  kept  in  view.  To  be  thoroughly  practical, 
within  the  grasp  of  those  whom  cooperation  will  most 
benefit,  and  a  true  friend  and  prudent  adviser  to  the 
masses  who  must  manifestly  find  their  way  out  only 
through  cooperation — is  the  high  aim  of  this  book.  It 
means  to  describe  the  How  rather  than  the  Wherefore 
of  Cooperation  ;  to  be  a  treatise  on  the  Art, — just  how 
to  cooperate, — rather  than  a  dissertation  on  the  Science, 
Theory  and  Ethics  of  the  subject.  Less  theory  and 
more  practice  is  the  great  need  of  cooperation.  Tc 
what  extent  this  aim  has  been  fulfilled  the  reader  must 
judge — not 

THE    AUTHOR 


HOW  TO  COOPERATE. 


CHAPTER  I. 

WHAT  COOPERATION    IS  AND  IS   NOT. 

"United  to  Relieve,  Not  Combined  to  Injure," 

— the  motto  of  the  Arlington  cooperators — states  in  the 
fewest  possible  words  the  province  of  cooperation.  The 
union  means  united  effort  among  individuals.  The 
relief  sought  will  vary  with  circumstances.  Men  often 
work  in  unison  to  accomplish  political  or  religious  re- 
forms. This  is  cooperative  effort  of  one  kind.  Again, 
people  unite  for  their  social,  moral  and  educational  ad- 
vancement. Carried  on  in  the  right  way  this  also  is 
cooperation. 

The  True  Cooperative  Spirit — Whatever  work- 
ing together  is  animated  by  the  true  cooperative  spirit 
— the  desire  to  do  as  we  would  be  done  by — is  in  one 
sense  cooperation.  Indeed,  the  aim  of  the  early  coop- 
erators of  half  a  century  ago  and  earlier  was  the  com- 
plete reorganization  of  society.  They  hoped  to  develop 
that  spirit  of  equity  and  equality  that  is  now  perhaps 
best  expressed  by  the  term  "Christian  socialism."  In 
such  a  state  of  society  people  would  practice  the  cardinal 
principles  taught  by  Jesus  Christ,  changing  the  existing 
order  of  things  so  far  as  necessary  to  carry  out  this 
beneficent  purpose.  This  evolution  was  to  be  worked 
9 


10  HOW  TO   COOPERATE. 

out  through  the  united  action  of  individuals,  rather 
than  brought  about  by  the  government  operation  of 
industry  contemplated  by  the  average  socialist  of  to-day. 
Cobperation,  as  Herein  Advocated  and  described, 
is  mainly  confined  to  union  of  effort,  the  fruits  of  which 
shall  be  divided  among  the  participants  according  to 
services  (labor)  rendered,  instead  of  being  paid  in  divi- 
dends on  capital.  Attention  is  concentrated  upon  united 
effort  in  the  following  directions  : 

1.  Buying  and  selling  supplies — cooperative  distri- 
bution. 

2.  Agricultural  operations,  and  converting  raw  pro- 
ducts or  other  materials  into  manufactured  articles — 
cooperative  production. 

3.  Saving  and  loaning  money — cooperative  banking. 

4.  Mutual  fire  insurance — cooperative  insurance. 
How  Adapted  to  All. — It  is  not  essential  to  such 

cooperation  that  the  participants  be  extremists  in  social 
regeneration  or  idealists  as  to  human  perfection.  One 
need  not  be  a  crank  to  become  a  cooperator.  On  the 
contrary,  the  wonderful  power  of  cooperation  lies  in  its 
adaptability.  Cooperation  accepts  human  nature  as  it 
exists  in  everyday  life.  This  is  why  cooperation  is  so 
eminently  practical.  Cooperation  takes  men  and  women 
as  they  are,  and  through  the  exercise  of  mutual  interest, 
tact  and  forbearance,  unites  them  in  effective  work  for  a 
common  object. 

The  progress  of  such  union  is  in  no  small  measure 
marked  by  the  degree  in  which  the  members  educate 
themselves  in  the  morals  and  principles  that  underlie 
cooperation.  But  such  education  need  not  largely  pre- 
cede cooperative  effort — the  two  go  hand  in  hand.  The 
best  progress  is  made  by  combining  the  practice  of 
cooperation  with  the  science  of  cooperation.  They  are 
one  and  inseparable,  to  the  fullest  benefit.  But  the  real 
way  to  cooperate  is  to  cooperate. 


WHAT  COOPBBATION  IS  AND  IS  NOT.  11 

Cooperation  not  a  Monopoly. — Right  here  .should 
be  emphasized  the  fact  that  cooperation,  as  herein 
treated,  is  in  no  sense  a  "trust"  or  syndicate,  as  those 
words  are  popularly  understood.  There  is  just  as  much 
difference  between  true  cooperation  and  the  trust,  or 
syndicate,  as  there  is  between  black  and  white.  The 
difference  is  just  this :  In  Cooperation,  people  hire 
capital,  pay  expenses  of  the  business  and  divide  the 
profits  in  dividends  on  labor,  that  is,  on  goods  handled 
or  produced.  The  capital  may  be  furiiished  by  the 
cooperators  or  hired  outside.  It  is  simply  hired,  and  a 
moderate  rate  of  interest  paid  on  it.  The  profits  and 
economies  effected  by  cooperation  are  divided  among 
the  producers  and  consumers  according  to  their  product 
or  labor.  The  Trust  is  a  combination  of  capitalists 
which  practices  extortion  upon  both  producer  and  con- 
sumer in  order  to  pay  still  bigger  dividends  on  capital. 
The  trust  aims  at  extravagant  returns  on  capital  at  the 
people's  expense.  Cooperation  aims  at  equal  distribu- 
tion of  the  profits  of  industry  among  the  participants, 
after  paying  capital  its  hire. 

In  other  words,  both  systems  reduce  expenses,  but 
cooperation  pays  the  profits  in  dividends  on  labor,  the 
trust  pays  profits  in  dividends  on  capital.  The  trust 
puts  monopoly  in  the  place  of  competition.  We  would 
substitute  cooperation  for  competition. 

The  difference  between  the  two  is  thus  fundamental. 
The  one  aims  at  the  interests  of  the  masses,  the  other  at 
the  interests  of  the  capitalists.  The  trust  works  to 
make  the  people  the  slaves  of  capital.  Cooperation 
would  have  capital  the  reasonably  paid  servant  of  the 
people.  Cooperation  stimulates  self-help.  It  renders 
it  easy  for  people  to  help  themselves;  it  makes  them 
happier  and  more  prosperous.  It  builds  up  the  entire 
community,  and  without  injury  to  any  interest.  It 
takes  the  place  of  competition,  in  a  legitimate  sense. 


12  HOW  TO  COOPERATE. 

Cooperation  is,  in  every  respect,  well  for  the  people  and 
the  state,  whether  considered  in  a  moral,  social,  reli- 
gious or  financial  sense.  The  trust  is  the  opposite  of 
all  this. 

Cobperation  vs.  Joint-Stock. — Neither  should  the 
cooperative  corporation  be  confounded  with  the  joint- 
stock  enterprise.  A  joint-stock  company  is  simply  a 
convenient  plan  for  dividing  the  ownership  of  a  business 
among  a  number  of  persons.  Such  a  concern,  like  a 
private  partnership  or  business  conducted  by  an  individ- 
ual, is  run  to  make  profits  on  capital  only.  Each  share 
in  a  joint-stock  corporation  is  entitled  to  one  vote. 
Thus  capital  both  controls  the  management  and  the 
profits.  Now  in  cooperation  each  member  has  but  one 
vote,  irrespective  of  the  number  of  shares  he  owns,  and 
the  profits  (after  paying  capital  its  hire  at  market  rates) 
are  divided  in  dividends  on  labor  or  purchases.  In  coop- 
eration, the  people  rule  and  divide  the  profits  ;  in  joint- 
stock,  capital  governs  and  absorbs  the  profits. 

Cooperative  vs.  Private  Trading The  great  point 

urged  against  the  cooperative  management  of  distribu- 
tion and  production  is  that  good  men  cannot  be  secured 
to  manage  the  cooperative  society.  The  man  who  would 
make  a  success  of  a  cooperative  society  will  go  into  busi- 
ness for  himself,  is  the  argument  used.  It  is  also 
claimed  that  not  suflBcient  oversight  can  be  paid  to  the 
business  by  directors  or  managers,  and  that  the  chances 
of  loss  and  failure  are  much  greater  in  cooperative  soci- 
eties than  in  "regular"  enterprises. 

Yet  the  very  men  who  thus  object  so  strongly  to  coop- 
eration among  the  people  practice  it  themselves.  They 
know  it  is  a  good  thing  for  them,  but  don't  want  the 
masses  to  get  its  benefits.  Look  at  the  big  stores  in  our 
large  cities — Wanamaker's,  in  Philadelphia,  for  in- 
stance. Since  its  heads  of  departments  are  so  compe- 
tent, why  don't  they  go  into  business  for  themselves  ? 


WHA.T  COOPERATIOlf  IS  AND   IS  NOT.  13 

If  there  is  such  danger  of  loss  and  thieving  in  a  large 
business,  why  doesn't  John  Wanamaker  do  all  his  work 
himself  ?  A  still  more  forcible  example  is  that  of  the 
Thurber  Whyland  Co.,  also  the  H.  B.  Claflin  Co.,  of 
New  York.  These  enormous  dealers  in  groceries  and 
dry  goods  respectively  have  recently  been  capitalized, 
and  have  placed  their  stock  as  extensively  as  possible 
among  the  storekeepers  throughout  the  country  with 
whom  they  trade,  and  also  among  their  own  employes. 
They  thus  practice  a  most  efficient  kind  of  cooperation, 
insuring  a  large  trade  by  giving  the  customer  part  of 
the  profits.  The  only  difference  between  this  system 
and  the  cooperative  store,  like  that  at  Lawrence,  Gal- 
veston or  Olathe,  is  that  in  these  cooperative  societies 
profits  are  divided  in  dividends  upon  purchases,  while 
the  Thurber  or  Claflin  companies  divide  their  earnings  in 
profits  on  capital  stock.  In  the  latter  case,  the  pur- 
chaser who  makes  the  profit  gets  only  as  much  of  it  as 
his  share-holdings  permit ;  while  in  the  genuine  cooper- 
ative store  each  member  gets  all  the  profits  of  his  own 
trade — a  vast  difference. 

Good  men  can  be  secured  to  manage  cooperative  enter- 
prises and  are  worth  just  as  much  to  them  as  to  private 
traders.  The  real  trouble  has  been  that  many  coopera- 
tors  tried  to  do  a  big  business  with  small  men.  A  cheap 
man  may  do  at  the  start,  if  he  is  faithful,  but  if  he  fails 
to  develop  with  the  business,  and  does  not  become  more 
valuable,  the  "coops"  should  get  a  better  manager. 
The  best  man  is  usually  the  cheapest,  though  he  may 
cost  much  more. 

Education  Required.— The  "almighty  dollar"  is 
the  thing  that  appeals  most  forcibly  to  the  average  of 
mankind.  Since,  therefore,  we  must  take  human  nature 
as  we  find  it,  the  first  thing  is  to  educate  the  people  up 
to  the  fact  that  cooperation  will  pay.  How  much  it 
will  pay  depends  upon  a  variety  of  influences,  especially 


14  HOW  TO   COOPERATE. 

the  faithfulness  of  the  cooperators  and  the  management 
by  the  oflScers.  In  distribution,  cooperators  can  expect 
to  pay  fair  interest  on  capital,  accumulate  a  reasonable 
reserve,  charge  off  conservatively  for  depreciation,  pay  a 
mite  to  the  educational  fund,  and  still  have  from  5  to  10 
per  cent  to  declare  in  dividends  on  the  amount  paid  for 
goods  bought  by  cooperators.  An  equally  large  divi- 
dend may  be  expected  on  the  price  received  by  farmers 
for  produce  sold  at  market  rates  through  the  cooperative 
exchange.  Actual  results  of  the  profits  and  economies 
of  cooperation  are  given  in  the  ensuing  pages. 

But  as  soon  as  people  get  ready  to  cooperate  for  the 
profit  they  will  thereby  make  or  save,  they  will  begin  to 
see  that  the  more  thoroughly  each  individual  is  educated 
in  the  great  principles  of  united  effort  the  larger  will 
be  their  profits,  not  only  financially,  but  socially  and  in 
other  ways.  Thus  the  desire  to  save  money  or  accumu- 
late a  competence  will  become  the  active  power  in  the 
great  social  reform  that  must  gradually  come  about  in 
the  substitution  of  the  practices  and  blessings  of  cooper- 
ation for  the  strife  and  ills  of  competition.  The  higher 
the  plane  of  the  educational  work — provided  it  is  kept 
strictly  within  the  means,  limitations  and  necessities  of 
the  cooperators — the  more  real  progress  will  be  made. 
The  intellectual,  social  and  moral  development  of  coop- 
erators should  ever  be  a  leading  object.  Education  in 
these  lines  stimulates  due  regard  for  each  other's  feel- 
ings and  wants,  and  promotes  better  citizenship  and 
better  Christianity.  Yet  cooperative  education  achieves 
this  end  without  infringing  in  the  slightest  degree  upon 
the  religious  or  political  convictions  of  cooperators. 

Cobperation  vs.  Politics  and  Religion. — Indeed, 
it  is  to  be  plainly  understood  that  cooperation,  as  herein 
advocated,  has  no  direct  relationship,  in  a  sectarian  or 
partisan  way,  to  either  religion  or  politics.  Believers  in 
all  sorts  of  religious  creeds,  agnostics  and  atheists,  may 


WHAT  COOPEBATION  IS  AND  IS  NOT.  15 

work  together  in  cooperative  enterprises  without  even  a 
suspicion  of  their  individual  differences  on  the  great 
prohlem.  Why?  Because  by  mutual  agreement  these 
matters  are  ignored  at  all  meetings  of  the  cooperators 
as  such. 

Likewise  protectionists  and  free-traders,  republicans, 
democrats,  prohibitionists  and  persons  of  diverse  views 
in  politics  and  economics,  make  model  cooperators  by 
dropping  this  line  of  thought  and  action  so  far  as  their 
cooperative  corporation  is  concerned. 

But  outside  of  the  cooperative  meeting,  nothing  hin- 
ders members  from  exercising  their  rights  and  privileges 
in  advocating  their  opinions  on  these  or  other  controver- 
sies of  the  day.  Cooperation,  therefore,  is  not  a  scheme 
to  proselyte  peculiar  faiths  or  politics.  Without  inter- 
fering in  the  slightest  degree  with  individuality  in  this 
direction,  cooperators  unite  for  financial,  social  and 
educational  improvement. 

The  education  required  will  therefore  show  that  while 
the  immediate  object  of  cooperation  is  the  making  or 
saving  of  money  by  the  people  on  their  own  supplies  or 
labor,  it  involves  principles  of  far  greater  possibilities. 
This  education  will  also  prove  that  the  more  perfectly 
these  principles  are  lived  up  to  by  cooperators  the 
greater  will  be  both  their  material  and  ethical  benefits. 

While  good  business  management  is  essential,  unless 
the  promoters  are  largely  imbued  with  the  spirit  of  true 
cooperation,  success  in  a  pecuniary  point  of  view  is 
doubtful,  and  the  beneficent  results,  morally  and  intel- 
lectually, will  be  entirely  lacking.  While  not  losing 
sight  of  the  dollars  and  cents,  the  members  should  real- 
ize that  the  effort  is  in  the  line  of  progress  and  equity  ; 
that  distributive  cooperation  is  to  develop  into  industrial 
(where  lies  its  greatest  conquests  in  the  future)  and 
thence  to  integral  cooperation. 

What  Cooperation  is  Not. — It  is  not  a  scheme 
whereby  visionary  enthusiasts  can  reform  the  world. 


16  HOW  TO  COOPEBATB. 

It  is  not  a  new  plan  of  transacting  business^  but  rather 
a  different  method  of  dividing  the  fruits  of  industry — to 
labor  rather  than  to  capital.  The  same  principles  that 
govern  success  in  acquiring  profit  on  capital,  apply  to 
the  acquirement  of  profit  to  divide  upon  labor.  Indus- 
try, application,  perseverance,  good  judgment, — all  are 
required  in  the  cooperative  as  in  the  existing  methods  of 
industry.  It  is  possible  for  the  dishonest  merchant  to 
thrive,  but  cooperation  must  also  depend  largely  upon 
the  moral  integrity  of  the  cooperators.  Indeed,  one  of 
the  marked  distinctions  between  the  new  and  the  old 
system  is  that  cooperation  is  "a  new  means  of  commer- 
cial morality,  by  which  honesty  is  rendered  productive." 
The  standard  quality  and  quantity  of  cooperative  goods 
are  among  their  chief  merits. 

So  cooperation  is  not  a  sure  way  to  ease  and  comfort 
for  the  shiftless  who  won't  work,  who  will  not  pay  for 
what  they  buy,  and  who  refuse  to  pay  others  for  working 
for  them.  It  is  not  a  means  whereby  the  business  of 
production  and  distribution  will  run  itself  and  pour  a 
golden  stream  into  the  pockets  of  the  people.  It  is  not 
proof  against  the  errors  of  ignorance  or  mismanagement. 
Neither  is  it  proof  against  the  knavery  of  man — against 
fraud  or  theft. 

In  short,  cooperative  effort  is  by  no  means  independ- 
ent of  the  every-day  principles  that  underlie  success  in 
any  undertaking  or  business.  It  is  not  philanthropy. 
It  is  not  a  bestowal  of  alms  upon  the  unfortunate  who 
cannot  or  will  not  try  to  get  ahead.  On  the  contrary, 
cooperators  help  themselves,  earn  their  profits  by  their 
combined  thrift  and  effort,  and  enjoy  the  full  fruits 
of  competence  gained  by  honorable  and  independent 
labor, — the  process  being  hastened  by  faithful  working 
together  in  distributive,  productive,  savings  and  loan, 
or  other  forms  of  cooperation. 

The  Perils  of  Credit,  all  of  which  are  avoided  by 
cooperation,  are  succinctly  stated  in  an  English  leaflet 


WHAT  COOPBRATIOK   IS   AND   IS   NOT.  17 

repriBted  by  several  American  "coops."  Every  cooper- 
ative store  or  society  will  do  well  do  reprint  this  leaflet 
for  its  members.     It  is  as  follows : 

*'In  its  demoralizing  influence,  credit  is  undoubtedly 
next  to  the  terrible  drinking  habit.  Credit  does  not 
encourage  thrift,  which  comes  from  economy  and  sav- 
ing. Credit  degrades  the  individual  by  a  consciousness 
of  wearing  unpaid  for  clothing,  or  of  owing  for  food 
that  has  produced  the  flesh  on  his  bones.  Credit  helps 
to  keep  the  working  man  dependent,  and  at  the  mercy 
of  his  employer.  Credit  may  absorb  a  good  portion  of 
the  capital  of  a  cooperative  store,  and  place  it  in  so  much 
the  worse  position  for  buying  to  the  best  advantage. 
Credit  increases  the  cost  of  living  and  distribution,  and 
otherwise  affects  the  cost  of  production  in  every  branch 
of  manufacture,  at  least  twenty-five  per  cent.  Credit 
inflicts  upon  the  community  a  frightful  tax  for  the  sup- 
port of  an  army  of  accountants,  lawyers,  and  others,  and 
this  tax  falls  upon  the  consumers.  Credit  opens,  to  a 
large  class  of  unprincipled  persons,  a  channel  for  the 
most  bare-faced  robbery.  There  is  only  one  way  by  which 
the  poor  can  acquire  capital,  become  free  from  the  servi- 
tude of  debt,  and  avoid  the  perils  of  credit,  and  that  is 
by  the  profits  that  can  be  gathered  from  the  articles, 
which  they  can  consume,  made  possible  by  cooperation 
on  the  Rochdale  plan  of  buying  and  selling  pure  goods 
at  fair  market  prices  for  cash,  and  distributing  equitably 
the  profits.  A  dollar  saved  is  as  good  as  a  dollar  earned. 
The  great  object  of  cooperation  is  to  encourage  living 
within  one's  means,  and  saving  from  spendings,  to  accu- 
mulate capital,  and  thereby  elevate  life  and  improve 
social  position." 

The   Required   Organization. — Union  of  effort  in 

distribution,  production,  banking  or  insurance,  is  largely 

a  matter  of  business.     Therefore,  it  does  not  require  a 

secret  organization.      It  is  not  absolutely  essential  to 

2 


18  HOW  TO   COOPERATE. 

cooperation  that  it  be  conducted  by  the  Grange,  Farm- 
ers' Alliance,  Knights  or  Federation  of  Labor  or  similar 
secret  organizations.  Properly  managed,  however,  these 
and  similar  orders  are  of  great  value  in  educating  their 
members  up  to  the  possibilities  and  practicability  of 
cooperation.  The  cooperative  society  may  be  composed 
entirely  or  partly  of  members  of  any  one  or  all  of  these 
or  like  orders.  But  so  far  as  the  cooperative  business 
itself  is  concerned,  it  is  not  essential  that  membership 
should  be  limited  to  those  who  are  identified  with  exist- 
ing secret  or  open  organizations.  If  the  shareholders  in 
a  cooperative  store  are  limited  to  those  who  are  members 
of  a  grange  or  other  lodge,  it  is  mainly  to  confine  the 
benefits  of  cooperation  to  the  members  of  that  special 
order.  But  associated  effort  in  business  is  by  no  means 
confined  to  these  organizations.  It  is  open  to  them  all 
and  to  the  general  public.  Of  course  the  more  fully  the 
Grange,  Alliance,  and  Federation  or  Knights  of  Labor 
avail  themselves  of  the  benefits  of  practical  cooperation 
under  good  management,  the  stronger  will  be  their  hold 
on  their  members.  But  the  benefits  of  cooperation  are 
open  to  all  who  choose  to  avail  themselves  of  the  same. 
The  organization  actually  required  is  a  company,  soci- 
ety or  corporation  legally  instituted  under  the  laws  of 
the  State  or  Territory  in  which  it  exists.  The  require- 
ments of  the  laws  in  the  respective  States  are  summa- 
rized in  another  chapter.  The  greatest  care  should  be 
taken  to  start  a  cooperative  store  on  a  legal  basis  so  that 
its  rights  and  powers  may  be  clearly  defined,  and  the 
liability  of  its  members  and  officers  confined  to  the 
amount  each  has  actually  invested.  This  is  essential  to 
proper  management  and  for  the  protection  of  the  mem- 
bers. Not  a  few  cooperative  enterprises  organized  from 
1870  to  1876  came  to  grief  not  only  through  mismanage- 
ment but  because  they  were  not  legally  incorporated  or 
organized,  and  in  some  cases  the  individuals  who  had 


WHAT   COOPERATION   IS   AND   is   NOT.  19 

done  the  most  work  and  put  in  the  most  money  were 
also  held  for  the  debts  of  the  society.  All  such  contin- 
gencies can  be  avoided  and  individual  liability  guarded 
against  by  organizing  under  the  statute.  In  completing 
the  details  of  the  cooperative  organization,  or  securing 
its  charter  or  license,  the  services  of  a  lawyer  should 
be  secured. 

The  Terms  Employed. — A  cooperator  is  one  who  is 
a  member  of  a  cooperative  association  and  actively  inter- 
ested in  its  welfare.  A  shareholder  is  a  person  who 
owns  one  or  more  shares  of  the  capital  stock  in  a  coop- 
erative society.  This  term  is  preferable  to  "stock- 
holder," the  latter  being  universally  employed  by  capi- 
talistic corporations.  Interest  is  the  amount  paid  for 
the  use  or  hire  of  capital.  Dividend  is  the  rebate  to 
members  on  their  purchases  or  sales,  or  on  their  labor, 
and  should  not  be  confounded  with  the  same  term  used 
to  indicate  the  interest  paid  on  stock  in  capitalistic  cor- 
porations. The  cooperative  corporation  is  best  termed  a 
society,  or  association,  in  contradistinction  to  the  mean- 
ing usually  attributed  to  the  word  corporation. 

Cooperative  Frauds. — One  of  the  strongest  evi- 
dences of  the  practical  merit  of  cooperation  is  the  extent 
to  which  the  principle  is  applied  under  false  pretenses 
or  in  a  fraudulent  manner.  Some  merchants  advertise 
their  store  as  "cooperative"  simply  to  mislead  the  pub- 
lic and  attract  patronage, — a  comparatively  harmless 
trick.  All  sorts  of  humbug  schemes  are  also  worked  in 
the  name  of  cooperation.  Prominent  among  these  at 
the  present  day  are  many  of  the  benefit  associations, 
assessment  endowment  orders,  numerical  bond  schemes 
and  the  like.  This  whole  tribe  of  "fake"  enterprises 
that  promise  two  dollars  for  every  one  paid  in  are  swin- 
dles or  lotteries,  and  libel  cooperation  by  attempting  to 
ally  themselves  to  it.  The  reader  should  not  allow  such 
humbugs  to  either  blind  his  eyes  to  the  merits  of  genuine 


20  HOW  TO   COOPERATE. 

cooperation  or  prejudice  his  mind  against  its  practi- 
cability. 

Apply  to  the  arguments  in  favor  of  any  of  these  fraud- 
ulent societies  the  principles  underlying  the  success  of 
legitimate  business,  and  of  true  cooperation  as  herein 
outlined,  and  their  nature  will  soon  be  exposed.  As 
cooperation  progresses,  it  will  be  possible  to  secure  uni- 
form laws  in  each  State  for  the  registry,  regulation  and 
protection  of  legitimate  cooperative  corporations.  Such 
statutes  will  prescribe  the  kind  of  corporation  that  may 
employ  the  term  ''cooperative"  in  its  title,  and  exclude 
all  others  from  this  privilege,  as  the  English  law  does 
so  well. 

Advantages  of  Cooperation. — In  general  we  may 
sum  up  by  saying  that — 

1.  The  greatest  advantage  of  cooperation  is  that  it 
enables  "the  common  people" — as  Abraham  Lincoln 
used  the  term — to  help  themselves, 

2.  It  promotes  thrift,  sobriety,  morality,  neighborli- 
ness,  kindness,  courtesy,  intelligence,  self-thinking  and 
good  citizenship. 

3.  It  can  adapt  itself  to  secure  its  advantages  to  ''all 
sorts  and  conditions  of  men,  including  men  of  various 
nationalities." 

4.  It  interferes  with  no  private  rights  or  individual 
opinions. 

5.  It  substitutes  the  beneficence  of  cooperation  for 
the  warfare  of  competition. 

6.  It  pays  labor  fairly,  adds  to  savings  and  yields  a 
reasonable  hire  to  capital. 

7.  It  enables  the  people  to  govern  and  divide  their 
earnings  instead  of  having  capital  rule  industry  and 
absorb  the  profits  thereof. 

8.  It  converts  the  love  of  money  and  the  power  of 
the  "almighty  dollar"  into  the  greatest  of  human  agen- 
cies for  the  amelioration  of  society. 


WHAT  COOPERATIOK   IS   AKD   IS   NOT.  21 

9.  It  "  begins  in  mutual  help,  with  a  view  to  end  in 
a  common  competence." 

10.  It  avoids  the  fallacy  of  ''equal  division  of  une- 
qual earnings,"  but  rewards  according  to  merit. 

11.  It  means  "concert  for  the  diffusion  of  wealth." 

12.  It  is  not  philanthropy,  neither  is  it  mendicant, 
servile  or  offensive,  yet  possesses  the  spirit  of  charity 
without  sacrifice  of  practical  utility, 

13.  "It  touches  no  man's  fortunes  ;  it  seeks  no  plun- 
der; it  causes  no  disturbance  in  society;  it  gives  no 
trouble  to  statesmen ;  it  need  enter  no  secret  associa- 
tions ;  it  needs  no  trades-unions  to  protect  its  interests ; 
it  contemplates  no  violence ;  it  subverts  no  order ;  it 
envies  no  dignity  ;  it  expects  no  gift  nor  asks  any  favor  ; 
it  keeps  no  terms  with  the  idle  and  it  will  break  no  faith 
with  the  industrious." 

14.  It  uses  circumstances  to  advance  its  principles, 
instead  of  wasting  energy  to  advance  its  principles 
against  circumstances. 

15.  It  insures  against  mistakes  by  educating  cooper- 
ators  to  a  clear  idea  of  what  they  are  doing,  uniting  such 
thought  with  action. 

16.  It  gives  men  and  women  a  knowledge  of  busi- 
ness they  could  not  otherwise  obtain. 

17.  It  enables  men  to  get  out  of  debt  and  to  keep 
out  of  debt,  and  correspondingly  alleviates  other  forms 
of  distress. 

18.  It  creates  a  field  for  individual  energy  and 
security  for  its  reward  while  avoiding  the  warfare  of 
competition. 

19.  It  is  really  the  only  way  in  which  the  masses 
can  advance. 

20.  It  promotes  sound  sense,  good  temper  and  good 
will. 

21.  It  reduces  expenses,  bringing  producer  and  con- 
sumer together,  giving  the  former  a  fair  profit,  while 


22  HOW  TO  COOPERATE. 

furnishing  the  latter  at  a  reasonable  price  articles  which 
are  honest  in  quantity  and  quality. 

22.  It  is  equity  in  business,  and  it  makes  equity  pay. 

23.  It  is  a  definite,  practical  thing,  all  of  whose 
principles  and  parts  can  be  brought  into  view  and  under- 
stood at  once. 

24.  It  recognizes  capital  as  an  expense,  whose  hire  is 
to  be  paid,  but  after  this  (like  other  expenses)  is  met, 
"labor  by  brain  or  hand  is  the  sole  claimant  of  profits." 

25.  It  delivers  the  public  from  the  middlemen,  cap- 
italists and  monopolists  who  would  make  the  laborer 
work  for  the  least  and  the  consumer  pay  the  utmost. 

26.  It  makes  saving  attractive,  easy  and  inevitable, 
without  self-denial  or  effort  on  the  part  of  the  individual. 

And  finally,  to  quote  more  fully  and  literally  its  dis- 
tinguished apostle  (Holyoake),  "Cooperation  was  bom 
of  the  feeling  that  at  best  unmitigated  competition  was 
but  organized  war,  and  though  war  had  its  great  con- 
quests, its  bards,  its  proud  associations  and  heroic  mem- 
ories, there  was  murder  in  its  march;  and  humanity 
and  genius  were  things  to  blush  for,  if  progress  could 
not  be  accomplished  by  some  nobler  means ;  what  an 
enduring  truce  is  to  war,  cooperation  is  to  the  never- 
ceasing  conflict  between  Labor  and  Capital — it  is  the 
Peace  of  Industry." 


CHAPTEE    II. 

THE  HISTOET  OF  COOPBEATION. 

The  Early  Period. — "It  is  cooperation  which  is 
ancient;  it  is  competition  which  is  new."  Ancient  his- 
tory mentions  nations  that  held  the  land  in  common 
and  divided  the  produce,  and  others  that  divided  the 
land  and  stored  the  produce  in  common.  The  early 
period  of  the  modern  idea  of  cooperation  dates  back  to 
Robert  Owen,  who  was  born  in  1771  in  Wales.  He  be- 
came a  great  cotton-spinner,  and  at  New  Lanark  con- 
ducted a  scheme  of  profit-sharing  and  improvement  for 
his  help  that  gave  a  marked  impulse  to  work  in  this 
direction.  He  proposed  a  complete  reorganization  of 
society.  Then  followed  a  period  of  enthusiasm  in  coop- 
erative distribution  in  England.  It  went  so  far  as  to 
devise  labor  exchanges  in  1833,  where  receipts  for  labor 
passed  as  money  and  as  the  standard  of  values.  Then 
cooperation  ran  in  the  line  of  community  life,  and  later 
looked  to  state  aid  and  socialism.  Many  stores  were 
organized  during  this  early  period,  but  most  of  them 
went  down  under  mismanagement  and  a  failure  to  recog- 
nize the  principle  of  cooperation. 

The  Common  Idea  in  England  at  that  time  of  a 
cooperative  store  was  the  idea  that  still  prevails  in  the 
popular  mind  in  the  United  States.  This  idea  is  that  a 
few  persons  get  together  in  a  more  or  less  business-like 
way — usually  less — subscribe  a  small  capital,  and  with  it 
buy  at  the  lowest  wholesale  prices  a  stock  of  such  goods 
as  the  subscribers  most  require.  These  goods  are  then 
retailed  to  the  members  of  the  company  at  cost,  thus 

23 


24  HOW  TO  OOfiPEEATE. 

cutting  prices  and  arousing  the  ire,  jealousy  and  compe- 
tition of  the  regular  merchants.  Not  only  this,  but  the 
goods  are  often  sold  on  credit,  and  the  person  having 
charge  of  the  store  is  supposed  to  work  for  nothing,  giv- 
ing his  time  as  evidence  of  his  devotion  to  the  cause. 
The  result  is  that  the  store  constantly  runs  behind,  the 
more  business  it  does  the  poorer  it  is,  its  capital  con- 
stantly dwindles,  and  it  finally  has  to  wind  up.  Because 
it  cuts  retail  prices,  such  a  "cooperative"  store  compels 
the  regular  merchants  to  put  down  their  prices.  Then, 
when  people  find  that  they  can  buy  just  as  cheap  at  reg- 
ular stores,  and  get  credit  besides,  they  think  there  is 
no  object  in  trading  at  the  cooperative  store,  and  so 
leave  it.  Thus  those  who  don't  put  any  money  into  the 
cooperative  enterprise  get  just  as  much  benefit  out  of  it 
as  those  who  back  it  up  with  their  capital.  Moreover, 
the  accounts  of  such  stores  are  often  loosely  kept,  and 
are  zealously  guarded  from  the  members  and  the  public. 
The  patrons  thus  get  an  idea  that  the  directors,  mana- 
ging committee  or  superintendent  of  the  store,  are  put- 
ting money  in  their  own  pockets  that  properly  belongs 
to  the  cooperators.  Thus  distrust  breeds  other  troubles 
and  hastens  the  final  failure.  The  store  breaks  up,  and 
the  local  press  and  public  echo  the  cry,  "I  told  you  so, 
cooperation  is  a  failure."  These  critics  entirely  overlook 
the  fact  that  such  procedure  is  not  genuine  cooperation, 
and  is  doomed  to  failure  from  the  start. 

The  True  Principle. — The  above  conception  of 
cooperation  failed,  after  half  a  century's  experience  in 
England,  just  as  it  has  always  failed  in  the  United 
States.  It  was  not  until  1844  that  the  true  principle  of 
cooperation  was  discovered — the  feeding  of  cooperation 
on  its  profits.  Then  it  was  that  a  few  weavers  started 
the  Equitable  Pioneers'  cooperative  store  at  Kochdale, 
England,  with  only  one  hundred  and  forty  dollars  cap- 
ital, which  had  been  accumulated  by  the  laborious  sav- 
ings of  pennies. 


THE  EISTOBT  OF  COdPBBATIOlT.  ^ 

They  originated  the  plan  now  known  as  the  Eochdale 
system,  in  which  each  person  was  limited  to  one  vote, 
electing  directors,  by  whom  the  business  is  conducted. 
Only  such  goods  as  are  of  standard  quality  and  in  con- 
stant demand  by  the  members  are  bought,  and  sold  to 
members  for  cash  at  the  ruling  retail  prices.  Cash  pay- 
ments are  invariably  required,  and  fair  prices  main- 
tained. A  record  is  kept  of  purchases.  The  profits  are 
divided  quarterly.  After  setting  aside  certain  sums  for 
interest,  depreciation,  reserve  and  education,  the  bal- 
ance of  the  profit  is  paid  as  a  dividend  on  the  amount 
of  purchases.  The  dividend  thus  received  by  each 
member  is  placed  to  his  credit  against  further  shares  of 
the  capital  stock  until  the  whole  number  of  shares  is 
made  up  to  which  any  one  person  is  entitled.  After 
such  shares  have  been  paid  up,  the  dividend  on  pur- 
chases is  paid  in  cash  at  the  end  of  the  quarter  or  may 
be  left  in  the  treasury  as  loan  or  share  capital.  Thus  the 
savings  effected  are  constantly  invested  in  the  business. 
This  feeding  it  on  profits  gives  cooperation  capital  and 
stability,  while  affording  a  safe  and  profitable  bank  for 
the  members'  savings,  and  enables  the  society  to  grow 
and  increase  its  business  and  usefulness. 

Growth  of  the  Principle — By  this  plan  of  accumu- 
lation of  profits  and  applying  them  to  the  development 
of  the  business,  the  Rochdale  Pioneers  grew  in  number, 
strength,  wealth  and  usefulness.  People  in  other  towns 
imitated  this  excellent  example.  Cooperative  stores 
increased  and  multiplied.  The  poorest  people  were 
thus  able  to  make  and  save.  Progress  was  at  first  slow, 
but  always  steady. 

The  history  of  the  development  of  cooperation  in  Eng- 
land reads  in  many  respects  like  a  romance.  The  small 
stores  constantly  added  to  their  capital  and  became  more 
helpful.  Their  doings  are  reported  in  full  to  the  stock- 
holders at  quarterly  meetings,  the  reports  accounting 


26  HOW  TO  COOPERATE. 

for  every  penny.  The  original  society  established  the 
precedent  of  setting  aside  two  and  one-half  per  cent  of 
its  net  profits  for  an  educational  fund,  a  plan  which  the 
most  successful  societies  have  ever  since  followed. 
These  societies  now  own  valuable  real  estate,  buildings, 
stores,  steamboats  and  fixtures,  maintain  numerous  lec- 
ture courses,  reading  rooms,  extensive  libraries,  classes, 
etc.  So  successful  has  cooperation  been  that  a  serious 
question  now  before  these  societies  is  the  best  use  to 
make  of  their  surplus  capital.  One  society  invested 
1300,000  in  foreign  securities  and  lost  it  all,  but  instead 
of  complaining  charged  it  off  to  profit  and  loss  and  went 
right  ahead.  The  strongest  of  these  associations  to-day 
are  those  which,  like  the  Rochdale  Pioneers,  made  the 
humblest  beginning. 

Its  Marvelous  Success — Starting  in  1844  with  28 
members  and  $140  capital,  the  Equitable  Pioneers'  Soci- 
ety, at  the  close  of  1890,  had  11,352  members,  a  capital 
of  11,811,790,  and  in  that  year  made  profits  of  $238,820 
on  a  total  business  reaching  $1,352,915.  It  has  23 
branch  stores  besides  the  central  one,  a  library  of  15,000 
volumes,  19  newsrooms,  and  numerous  classes  in  the  sci- 
ences and  industrial  arts. 

The  Rochdale  Pioneers  spared  no  effort  to  spread 
abroad  their  principles  and  methods.  Their  example 
was  quickly  imitated.  Mismanagement  and  the  absence 
of  sufficient  legal  safeguards  caused  many  failures  at 
first.  Gradually,  however,  laws  were  obtained  equally 
as  favorable  to  cooperative  societies  as  to  joint-stock  cor- 
porations. The  cooperators  met  in  annual  congress  to 
exchange  views,  and  later  organized  a  central  board  and 
cooperative  union,  with  branch  sections,  to  facilitate  the 
organization  of  cooperative  effort  and  its  proper  man- 
agement. The  result  is  that  during  the  last  thirty  years 
failures  in  cooperative  stores  in  England  have  been  less 
than  in  commercial  enterprises  as  usually  conducted. 


THE  HISTORY  OF  COOPEEATIOlf. 


27 


Nor  is  the  Rochdale  society  the  largest  of  the  retail 
stores.  That  at  Leeds,  England,  has  over  26,000  mem- 
bers, with  $1,520,000  capital,  making  annual  sales  of 
$3,000,000,  and  paying  an  average  dividend  on  the  pur- 
chases of  over  11  per  cent.  Then  there  are  other  socie- 
ties that  run  down  to  25,  50  or  100  members,  and  from 
that  up.  In  all  there  were  just  1,400  of  these  distribu- 
tive societies  or  cooperative  stores  for  retailing  family 
supplies  in  Great  Britain  at  the  end  of  1889,  exclusive 
of  the  numerous  branch  stores  operated  by  many  of  the 
societies.  Their  members  numbered  963,954.  Their 
share  capital  was  $48,389,935  ;  loan  capital  or  deposits, 
$5,106,470;  reserve  fund,  $1,995,235;  total  capital, 
$55,491,640.  Their  assets  included  goods  and  stock  on 
hand  to  the  value  of  $14,817,795;  the  value  of  land, 
buildings  and  fixed  stock  was  $21,515,030;  their  invest- 
ments to  the  end  of  1889  were  $23,617,905,  besides  which 
they  had  allowed  for  depreciation  during  the  year  of 
$887,335,  making  the  total  assets  $60,838,065.  Owing 
to  the  previous  liberal  charging  off  for  depreciation, 
the  market  value  of  these  assets  was  much  more  than 
this  sum. 

The  latest  progress  of  cooperation  in  England  was 
reported  at  the  Cooperative  Congress  held  at  Lincoln,  in 
May,  1891,  the  returns  covering  both  distributive  and 
productive  societies,  and  making  the  following  com- 
parison : 


No.  of  societies 

Members 

Share  capital 

Total  sales , 

Net  profits  for  year  , 
Amount  Invested 


1890. 

1889. 

Irv- 
crease. 

Inc 

% 

1,554 

1,516 

39 

2.6 

1,117,055 

1,054,996 

62,059 

5.8 

$61,309,760 

$55,099,670 

$5,310,090 

9.5 

216,001,595 

201,127.030    14,874,565 

7.3 

$20,850,190 

$18,877,320    $1,972,870 

10.4 

$31,484,820 

$27,043,110 

$4,441,710 

16.4 

The  Business  and  Profits — These  1,400  distribu- 
tive societies  in  1889  sold  goods  to  the  value  of  $135,- 
645,960.     Their  operating  expenses  were  $7,589,570,  or 


28 


HOW  TO  OOdPEBATB. 


about  5^  per  cent  on  the  sales.  .  Their  total  net  profits 
amounted  to  117,133,490. 

Five  per  cent  interest  on  the  total  capital  invested 
required  $2,774,582,  besides  which  there  was  set  aside 
for  educational  purposes  1132,885,  for  charity  $43,745, 
and  for  the  support  of  the  central  board  and  propaganda 
$19,710,  a  total  of  $2,971,122.  This  left  $14,162,368  as 
the  amount  paid  in  dividends  on  purchases  of  over 
$130,000,000,  or  nearly  11  per  cent.  That  is  to  say, 
while  some  of  these  cooperative  stores  paid  more  and 
others  less,  on  the  average  the  whole  1,400  cooperative 
retail  societies  returned  to  their  patrons  about  eleven 


Fig.  1.   Central  Store  of  the  English  Wholesale  CoSpebativb 
Society.    Business  nearly  $40,000,000  annually. 

cents  for  every  100  cents  expended  in  purchases  at  these 
stores.  Besides  this,  5  per  cent  was  paid  on  capital, 
liberal  grants  made  to  education  and  charity,  and  great 
sums  passed  to  reserve  or  charged  off  for  depreciation. 
Had  the  total  net  profits  been  applied  to  capital,  it 
would  have  earned  over  30  per  cent. 

The  Wholesale  Societies — As  the  cooperative  re- 
tail stores  increased  in  number,  the  advantages  became 
apparent  of  a  central  agency  through  which  all  the  local 
stores  might  buy  their  goods.     The  English  Wholesale 


THE  HISTOET  OP   COOPERATION.  29 

cooperative  society  was  therefore  organized  in  1863,  and 
began  business  the  next  year.  It  first  operated  on  a 
commission  basis,  but  soon  adopted  the  usual  plan  of 
buying  at  one  price  and  selling  at  another,  dividing  the 
profits  to  the  societies  in  dividends  on  purchases.  Its 
capital  is  in  shares  of  twenty-five  dollars ;  each  local 
society  takes  in  its  own  name  one  share  for  each  ten 
members,  paying  twenty-five  cents  on  application,  and 
allowing  the  profits  on  its  purchases  to  accumulate  until 
the  shares  are  paid  up.  Societies  are  entitled  to  one 
delegate  to  the  Wholesale's  quarterly  meetings  for  each 
five  hundred  members,  each  delegate  having  one  vote. 
A  general  committee  of  sixteen  governs  the  central  estab- 
lishment of  the  Wholesale  at  Manchester,  and  commit- 
tees of  eight  each  manage  the  branches  at  London  and 
Newcastle.  The  latter  each  send  a  representative  to  the 
general  committee.  The  elections  of  committee  members 
are  by  voting  paper,  societies  being  entitled  to  as  many 
votes  as  they  are  allowed  delegates.  Not  more  than  one 
member  of  a  society  can  be  a  member  of  the  committee. 
Quarterly  meetings  are  held  at  the  branches  and  at  the 
central ;  a  majority  of  the  votes  of  all  three  meetings 
are  required  to  carry  a  resolution. 

The  English  Wholesale  has  assumed  enormous  propor- 
tions. Besides  its  two  selling  branches  it  has  sub- 
branches  at  Leeds  and  Bristol  and  buying  branches  in 
various  parts  of  the  United  Kingdom,  and  at  New  York, 
Copenhagen  and  Hamburg.  It  also  conducts  extensive 
manufactures  of  biscuit  and  confectionery,  soap,  boots 
and  shoes,  woolen  mills  and  tailoring  establishments. 
A  special  tea  and  coffee  branch  at  London  sells  over  two 
million  dollars'  worth  annually  of  these  staples.  The 
amount  of  trade  done  with  foreign  countries  direct  dur- 
ing the  three  months  ended  Sept.  27,  1890,  was  nearly 
$2,500,000,  of  which  over  $600,000  was  paid  for  Ameri- 
can   cheese,   bacon,    hams,   flour,   lard,   tallow,   sugar. 


30 


HOW  TO  COOPERATE. 


canned  meats  and  tomatoes,  a  id  over  $1,000,000  to  Den- 
mark for  butter,  eggs,  bacon  and  oil.  The  Wholesale 
runs  six  steamers  for  the  direct  transportation  of  its 
goods  between  England  and  the  Continent.  Starting  in 
1864  with  ^12,275  capital  contributed  by  retail  societies 
that  had  18,337  members,  its  sales  were  over  $250,000 
in  the  first  thirty  weeks,  since  which  time  its  marvelous 
progress  may  be  inferred  from  the  following  comparisons  : 


No.  $25  shares  taken  up. 
No.  of  members  of  socie- 
ties holding  shares 

Sliare  capital 

Loans  and  deposits 

Reserve  funds 

Insurance  funds 

Reserved  expenses 

Total  capital 

Amount  of  net  sales  for 

the  year 

Expenses  of  distributive 

departments 

Total  net  profits 

Transferred   to   reserve 

and  insurance  fund.. : 


18,337 
$12,275 


$12,275 
259,285 


1,735 
1,335 


1874 

13,899 

168.985 
$240,630 

$739,745 

8,065 
11,780 


1,000,220 

8,184,750 

105,735 
71,165 

4,610 


1884. 


45,099 

459,734 
$1,035,400 

2,474,200 

125,630 

121,620 

49,940 

3,806,790 

23,376,855 

351,715 
272,455 

32,155 


1889. 


72,399 

679,336 
$1,711,090 

3,611,605 

291,790 

597,705 

45,985 

6,258,175 

35,144,720 

689,245 
509,920 

94,935 


1890. 


92,572 

721,316 
$2,170,085 

4,124,870 

242,725 

776,155 

58,475 

7,372,330 

37,145,365 

633,945 
634,895 

104,610 


The  totals  of  the  Wholesale's  business  from  October  1864  to  Decem- 
ber 27,  1890,  are:  sales,  $387,387,045;  expenses,  $5,911,340;  net  profits, 
$5,143,245:  exclusive  of  reserve  and  insurance  funds  amounting  to 
$901,310. 

The  Scottish  Wholesale,  started  in  1868,  now  has  over 
$2,500,000  capital,  with  sales  of  upward  of  $12,000,000 
annually  and  profits  of  over  $300,000.  The  English  and 
Scottish  societies  unite  in  publishing  the  Wholesale  So- 
ciety's Annual,  which  for  1891  is  illustrated  with  pic- 
tures of  the  great  warehouses,  stores,  factories,  steam- 
ships and  officials  of  the  societies,  and  gives  a  summary 
of  the  finances  of  all  the  different  departments  of  the 
business.  Just  128  large  pages  are  required  for  this 
information  alone.  The  quarterly  reports  of  the  Whole- 
sale make  a  bulky  document  of  thirty  pages,  each  10x17 
inches  in  size,  with  itemized  tabular  accounts  of  the 
business  in  general,  by  departments,  and  with  each  of 
the  1000  or  more  local  societies  to  which  it  sells.     The 


THE  HISTOEY   OF   COOPERATION. 


31 


character  of  the  management  is  shown  by  the  fact  that 
the  losses  from  bad  debts  have  been  only  $45,000  on  a 
business  by  the  two  Wholesales  of  over  $230,000,000. 

The  profits  reported  do  not  fully  show  the  usefulness 
of  these  great  agencies,  for  they  wholesale  at  as  small  an 
advance  over  actual  cost  as  is  consistent  with  safety, 
thus  making  their  profits  as  small  as  possible  but  effect- 
ing great  savings  to  the  retail  stores  on  first  cost  of  goods. 

A  Birds-Eye  View  of  Cooperation  in  England, 
Ireland,  Scotland  and  Wales  from  1861  to  1890  inclusive 
is  an  impressive  sight,  as  appears  from  the  following 
table  (official  figures,  the  £  computed  at  $5) : 


Year. 

Societ's 
makUuf 
Returns 

Mem- 
bers. 

Share 
Capital. 

Loan 
Capital. 

Trade. 

Profit. 

1861 

48,184 

$1,666,450 
1,553,655 

$7,560,586 
11,745,275 

1862 

'  450 

91.502 

'$272,260' 

$831,510 

1863 

460 

108;588 

2,867,910 

367,715 

13,133,705 

1,068,115 

1864 

505 

129,429 

3,420,910 

445,610 

14,183,030 

1,122,300 

1865 

867 

148,586 

4,096,835 

536,315 

16,869,235 

1,396,130 

1866 

915 

174,993 

5,231,550 

590,115 

22,313,380 

1,861,535 

1867 

1,052 

171,897 

7,375,995 

683,670 

30,005,765 

1,992,890 

1868 

1,242 

208,738 

10,138,880 

920,815 

40,565,360 

2.127,710 

1869 

1,300 

220,000 

10,000,000 

950,000 

40,500,000 

2,500,000 

1870 

1,375 

249,113 

10,171.305 

985,640 

41,012,330 

2,777,175 

1871 

746 

262,188 

11,529,755 

1,077,765 

47,187,355 

3,353,605 

1872 

748 

300,931 

13,928,885 

1,722,545 

56,942,950 

4,038.740 

1873 

980 

387,701 

17,564.810 

2,488,750 

78,312.265 

5,595,115 

1874 

1,026 

411,252 

19,518,040 

2,934,860 

81,791,390 

6.130,050 

1875 

1,163 

479,284 

23,504,950 

4,223,100 

80,440,385 

7,126,335 

1876 

1,163 

507,857 

26,520,095 

4,598,810 

99,548,495 

8,706,190 

1877 

1,144 

528,582 

27,439,795 

5,366,325 

106,870,065 

9,500,805 

1878 

1,181 

560,703 

28,651,090 

4,363,430 

105,641,570 

9,089,715 

1879 

1,169 

573,084 

28,739,205 

7,470,215 

101,828,010 

9,747,670 

1880 

1,183 

6M,063 

31,160,465 

6,706,450 

116,241,570 

7,89<»,365 

1881 

1,230 

642,783 

34,686,420 

7,417,915 

124,630,025 

9,897,880 

1882 

1,145 

654,038 

36,446,795 

7,319,795 

132,867,755 

10,534,790 

1883 

1,165 

681,691 

37,504,175 

7,692,720 

140,446,550 

11,620,155 

1884 

1,264 

849,615 

41,025,365 

8,585,250 

146,476,ia5 

13,2<)3.2.30 

1885 

1,288 

803,747 

43,998,765 

9,135,545 

149,413,395 

14,418.805 

1886 

1,296 

835,200 

46,487,530 

9,998,290 

156,268,785 

14,a51.715 

1887 

1,291 

896,910 

49,088,9.36 

10,222,490 

183,486,265 

15,,34<i,;M0 

1888 

1,369 

943,949 

51,919,410 

11,412,595 

180,026,175 

16,524.215 

1889 

1,515 

1,054,996 

.55,999,670 

12,379,425 

201,127,030 

18,877..320 

1890 

1,554 

1,117,055 

$61,309,760 

$13,001,600 

$216,001,595 

$20,8.')0.1iK) 

Total I  $2,743,436,440  |  $233,059,495 

Cooperative  Production. — Aside  from  the  great 
mills  and  factories  conducted  by  the  two  wholesale  soci- 
eties, there  were  in  Great  Britain  at  the  end  of  1889,  100 
other  societies  that  made  a  specialty  of  cooperative  pro- 


32  HOW  TO  COOPERATE. 

duction  or  manufacture  in  some  form,  including  hosiery, 
clothes,  twine,  watches,  printing,  nail-making,  stone- 
workers,  flour  mills,  hardware,  implements,  machinery 
and  engines,  boots  and  shoes,  locks,  etc.  These  socie- 
ties had  25,839  members  and  a  total  capital  of  $4,319,890, 
with  land,  machinery,  investments  and  other  assets  to 
the  amount  of  14,078,225.  They  produced  and  sold  in 
1889  goods  to  the  amount  of  $9,718,560,  with  expenses 
of  $831,535,  and  their  total  net  profits  were  $429,015, 
or  10  per  cent  on  the  capital  invested. 

Progress  of  Cooperation  in  the  United  States. — 
Aside  from  profit-sharing  in  the  fisheries,  cooperation  in 
the  United  States  began  in  1842-7,  with  the  attempt  to 
form  a  cooperative  commonwealth  at  Brook  farm,  near 
Boston.  It  was  the  manifestation  in  America  of  the 
same  theories  of  social  amelioration  that  were  showing 
themselves  in  the  organization  of  similar  communities 
in  England  and  on  the  Continent  at  the  same  time. 
This  was  followed  by  the  Workingmen's  Protective 
Union,  which  in  1850  had  106  divisions  in  Massachu- 
setts alone,  through  which  members  bought  their  sup- 
plies at  the  lowest  possible  prices.  It  is  stated  that 
within  a  few  years  the  number  of  these  stores  was  over 
700  throughout  New  England  and  the  Middle  States, 
and  the  sales  in  1855  from  63  divisions  of  the  New  Eng- 
land union  amounted  to  over  $1,000,000.  But  the 
stores  were  not  incorporated,  and,  not  being  fed  on  their 
profits,  gradually  failed,  the  break-up  being  hastened  by 
the  uncertainty  of  prices  and  the  opening  of  the  civil 
war.  Such  a  system  of  stores  based  on  selling  goods  at 
cost,  and  thus  underselling  all  other  stores,  could  not 
be  maintained.  A  few  of  the  stores  thus  organized  still 
exist,  but  no  longer  do  business  for  the  fun  of  it. 

Then  came  the  Patrons  of  Husbandry,  or  the  Grange. 
Founded  in  1866,  this  order  reached  mammoth  propor- 
tions early  in  the  '70's.     It  is  to-day  the  oldest  and  most 


THE   HISTORY   OF   COOPERATION.  33 

conservative,  if  not  the  most  powerful,  of  our  farmers' 
organizations.  Flushed  with  the  success  of  unparalleled 
growth,  the  Grange  undertook  to  establish  cooperative 
stores  throughout  the  country.  But  the  membership 
was  not  ready  for  cooperation.  These  efforts  were 
mostly  operated  on  the  plan  of  the  union  stores  just 
described,  the  goods  being  sold  at  wholesale  prices  as 
nearly  as  possible.  This  was  putting  in  practice  the 
common  idea  of  cooperation  outlined  in  the  second  para- 
graph of  this  chapter.  It  was  but  natural  that  whole- 
sale failure  should  ensue,  although  a  few  so-called  grange 
stores  still  survive.  These  are  either  now  managed  as 
joint-stock  enterprises  or  on  the  Kochdale  system. 
The  most  successful  are  in  Texas  and  Kansas,  noted 
elsewhere,  while  others  are  mentioned  in  the  Appendix. 
The  Grange  inaugurated  the  system  of  trade  discounts, 
whereby  the  members  secured  goods  at  reduced  prices 
for  cash  by  concentrating  their  orders  on  certain  stores. 
Enormous  savings  were  thus  effected,  and  prices  of  im- 
plements and  manufactured  articles  were  permanently 
reduced  by  this  system.  Taking  the  country  as  a  whole 
the  farmers  saved  millions  upon  millions  of  dollars 
through  the  grange  system  of  discounts.  But  this  sys- 
tem is,  at  best,  only  temporary,  and  becomes  more  un- 
satisfactory the  longer  it  is  tried.  It  provides  no  means 
whatever  for  combining  and  utilizing  the  savings  effected. 
The  Sovereigns  of  Industry  became  prominent  in  the 
Eastern  States  in  1874-8.  It  claims  to  have  been  the 
first  organization  to  push  the  Rochdale  plan  of  coopera- 
tion, but  few  of  the  stores  lived  up  to  this  system.  The 
old  idea  of  selling  goods  at  cost  or  on  credit  wrecked 
most  of  the  Sovereign  stores,  although  a  few  organized 
under  these  auspices  still  exist.  One  of  the  most  suc- 
cessful of  these  is  at  Lewiston,  Maine,  the  example  of 
which  led  to  the  organization  of  the  Lisbon  Falls  coop- 
erative association,  whose  store  is  shown  herewith. 
3 


34 


HOW  TO  COOPERATE. 


In  these  later  days  the  Farmers'  Alliance  is  practicing 
the  Grange  system  of  trade  discounts  on  an  extensive 
scale,  and  establishing  State  business  agents  to  purchase 
supplies  for  its  members  at  a  small  commission  for  cash. 
In  several  States  the  alliances  are  trying  to  raise  a  capital 
to  facilitate  the  work  of  their  business  agent  or  ex- 
change, but  the  commission  plan  is  the  one  usually 


Fig.  2.    Stobe  and  Block  of  the  Lisbon  Falls  (Maine)  Coopera- 
tive Association. 


adopted,  and  no  attempt  is  made  to  capitalize  profits 
and  thus  insure  the  permanency  of  the  work.  An  ef- 
fort in  this  direction  was  made  by  the  Texas  Farmers' 
Alliance  exchange  at  Dallas,  but  it  appears  to  have  been 
conducted  on  credit  and  without  due  attention  to  busi- 
ness principles,  and  therefore  failed  disastrously.  It 
has  since  been  reorganized  on  a  more  business-like  basis. 


THE   HISTOKY   OF   COOPEBATIOK.  35 

and  confining  its  operations  to  cash  transactions  is  serv- 
ing a  useful  purpose  in  a  modest  way. 

The  Farmers'  Mutual  Benefit  Association  of  the  Cen- 
tral States,  the  Patrons  of  Industry  of  Michigan  and 
elsewhere,  and  other  farmers'  clubs,  still  practice  the 
system  of  trade  discounts  quite  extensively.  The  same 
plan  is  worked  in  a  moderate  degree  by  a  few  of  the 
labor  organizations.  There  have  also  been  numerous 
more  or  less  connected  efforts  among  farmers  to  unite 
in  marketing  their  produce.  The  most  successful  have 
been  the  associated  manufacture  and  sale  of  butter  and 
cheese  elsewhere  described.  In  many  sections  the  grow- 
ers of  special  crops,  particularly  fruit  and  truck,  have 
united  to  secure  better  transportation  privileges  and 
rates,  improved  prices,  etc. 

Cooperation  in  saving  and  loaning  money,  and  in  fire 
insurance,  has  also  been  extensively  practiced  from  an 
early  date,  as  appears  in  the  chapters  on  these  topics. 

The  progress  of  women's  exchanges  for  the  sale  of 
articles  made  by  women  has  also  been  gratifying  of  late. 

Progress  of  the  True  System. — Out  of  all  this 
experience,  agitation  and  education,  the  true  principles 
of  cooperation  are  beginning  to  be  understood  and  put 
in  practice.  Where  properly  managed,  and  adhering 
strictly  to  the  Kochdale  system,  cooperative  distribution 
is  proving  a  magnificent  success.  Some  of  these  suc- 
cesses are  described  in  the  following  chapters,  and  others 
are  quite  fully  epitomized  in  the  Appendix.  The  in- 
structions and  methods  herein  advocated  are  based  on 
such  actual  and  successful  experience,  profiting  also  by 
the  lessons  of  past  failures. 

The  reader  will  therefore  see  that  cooperation  is  not 
an  untried  theory  but  a  practical  success,  the  adapta- 
tion of  which  to  the  wants  and  necessities  of  American 
farmers  and  workers,  producers  and  consumers,  has  been 
permanently  demonstrated  by  our  own  people  in  city 
and  country  under  all  sorts  of  conditions. 


CHAPTER  III. 

THE  COOPERATIVE  STOEB. 

The  Simplest  Form — The  cooperative  store  is  the 
most  feasible,  most  practicable  and  simplest  form  of 
cooperative  distribution.  Of  it  in  particular  is  true 
almost  every  word  that  has  been  said  in  behalf  of  coop- 
eration in  our  opening  chapters.  The  cooperative  store 
is  adapted  to  every  locality,  large  or  small,  rich  or  poor, 
thickly  populated  or  thinly  settled.  Wherever  it  is  nec- 
essary to  have  a  store  for  furnishing  household  supplies 
and  to  cater  to  the  ordinary  wants  of  people,  there  the 
cooperative  store  can  flourish  if  it  is  only  managed  right. 

Just  What  It  Is.  —Like  any  other  store,  the  one 
owned  by  the  cooperative  society  carries  a  line  of  goods 
that  the  local  public  are  most  certain  to  buy.  All  sales 
are  made  for  cash,  and  one  price  is  charged  to  all  cus- 
tomers. Under  this  system  the  poor  man,  with  a  large 
family,  receives  the  greatest  benefit — for  the  more  a  cus- 
tomer purchases  at  his  own  store,  the  greater  is  his 
share  of  the  profits.  In  other  respects  it  is  managed 
like  stores  owned  by  private  capitalists.  The  distinction 
between  the  two  is  clearly  described  in  the  paragraph, 
"What  Cooperation  is  Not,"  on  Page  15. 

There  is  this  important  exception,  however :  The 
cooperative  store  should  not  condescend  to  competition. 
It  should  not  cut  prices.  Instead  of  that,  it  should 
establish  the  price  of  goods  in  its  section  at  a  fair  ad- 
vance over  the  actual  cost  of  the  goods  laid  down  in  the 
store.  But  the  old  idea  of  retailing  goods  at  cost  is 
erroneous,  as  it  deprives  the  society  of  profits  with  which 

36 


THE   COOPERATIVE   STORE.  37 

to  increase  its  business  and  with  which  to  add  to  its 
sinking  fund,  and  therefore  to  its  stability.  As  previ- 
ously intimated,  most  of  the  stores  started  on  the  plan 
of  retailing  at  just  above  cost  have  failed,  the  most  nota- 
ble exception  being  the  Allegheny  County  Patrons'  Asso- 
ciation elsewhere  referred  to.  At  the  same  time,  the 
retail  prices  should  be  reasonable,  so  as  to  help  the  poor 
man  by  saving  money  on  first  cost.  Then  the  profits  of 
the  business,  after  making  provision  for  interest,  depre- 
ciation and  reserves,  can  be  divided  among  the  members 
pro  rata,  according  to  their  paid-up  purchases. 

A  Model  Association. — Probably  the  clearest  and 
best  idea  of  just  how  to  run  a  cooperative  store  will  be 
obtained  from  a  complete  description  of  the  Arlington 
cooperative  association.  After  a  thorough  inquiry,  it  is 
evident  that  this  society  at  Lawrence,  Massachusetts,  is, 
beyond  question,  one  of  the  best  patterns  of  what  a  true 
cooperative  association  should  be  that  the  United  States 
affords. 

This  is  at  least  true  of  it  as  a  cooperative  store,  pure 
and  simple — for  the  Arlington  has  not  undertaken  any 
productive  enterprises  or  commission  business.  Nor  is 
this  high  praise  in  the  least  invidious  or  derogatory  to 
other  cooperative  societies,  some  of  which  are  fulfilling 
their  purpose  most  efficiently. 

How  it  Started — As  in  many  other  cities,  several 
attempts  at  distributive  cooperation  in  Lawrence  had  re- 
sulted disastrously.  The  town  has  some  44,654  popula- 
tion, the  principal  industry  being  the  cotton  and  worsted 
mills,  prominent  among  which  are  the  Arlington  mills. 
Among  the  workers  in  these  mills  are  many  English, 
Scotch  and  Irishmen,  who  had  been  members  of  cooper- 
ative societies  at  their  old  homes  in  Great  Britain ;  yet 
the  peculiar  advantages  they  enjoyed  for  this  re'ason  had 
not  been  sufficient  to  insure  the  success  of  the  early 
efforts  at  cooperation  in  Lawrence. 


38 


HOW   TO  COOPERATE. 


In  spite  of  previous  failures,  however,  some  of  the 
most  intelligent  workers  in  the  Arlington  mills  discussed 
the  matter  in  a  quiet  way.  The  overseers  in  the  differ- 
ent departments  of  the  mills — men  who  had  worked  up 
from  the  lowest  round  and  knew  thoroughly  the  wants 
of  the  operatives — were  leaders  in  the  movement,  and 
had  the  assistance  of  the  treasurer  of  the  company,  "Wil- 
liam Whitman,  and  also  of  other  gentlemen  connected 
with  the  counting  room  of  the  mills,  who  freely  gave 
their  time  and  advice.     Among  them  was  the  super- 


FlG.  3.     ABLINGTON'8  HUMBLE   BEOINNItrO. 


intendent  of  the  mills,  William  D.  Hartshorne,  who 
was  the  enthusiastic  and  capable  president  of  the  "coop- 
erative "  for  its  first  three  years ;  also  Charles  Wain- 
wright,  the  paymaster,  who  acted  as  treasurer  for  the 
two  first  years.  After  a  few  informal  meetings,  at 
which  the  matter  was  explained  by  those  best  informed. 


THE   COOPERATIVE    STOEE.  39 

subscriptions  to  the  capital  stock  of  the  proposed  associ- 
ation were  invited,  and,  after  a  little  more  effort,  six 
hundred  shares  of  five  dollars  each  were  sold  to  two 
hundred  and  eighty  individuals,  mostly  the  practical 
workers  in  the  mills. 

The  subscribers  appointed  a  committee,  who  took  legal 
advice,  and  were  incorporated  July  8,  1884,  as  the  Ar- 
lington cooperative  association,  under  the  cooperative 
law  of  Massachusetts,  with  a  capital  of  $3,000.  The 
association  began  business  Sept.  15  in  the  small  building 
illustrated  in  Fig.  3. 

An  Humble  Beginning — The  capital  was  all  in- 
vested in  a  stock  of  goods,  very  little  being  put  into  fix- 
tures. The  members  were  determined  to  begin  small 
and  work  up  only  as  success  justified.  This  rule  they 
have  faithfully  adhered  to,  and  upon  tliis  rule  depends 
the  success  of  every  cooperative  association.  So  deter- 
mined were  the  Arlington  cooperators  to  avoid  unneces- 
sary expense  and  show  that  for  the  first  year  or  two  the 
store  was  devoid  of  both  chairs  and  desk,  soap  boxes 
serving  for  the  former  and  a  board  across  two  barrels 
answering  all  the  necessities  of  a  desk.  For  it  should 
be  noted  that  all  purchases  were  for  cash  and  all  sales 
for  cash,  thus  requiring  but  very  little  bookkeeping. 
Tlie  officers  were  men  in  whom  the  people  had  confi- 
dence, and  for  the  first  two  years  the  membership  was 
confined  to  the  Arlington  operatives,  but  at  the  end  of 
that  time  the  success  of  the  association  was  so  substan- 
tial that  this  restriction  on  membership  was  removed. 

A  Most  Instructive  Point  for  would-be  cooperators 
was  the  quiet  way  in  which  the  Arlington  started.  It 
did  not  seek  notoriety.  The  meetings  and  discussions 
of  the  workingmen  when  they  were  getting  ready  to 
organize  were  not  heralded  in  the  local  press.  The 
characteristic  American  habit  of  rushing  into  print,  of 
making  great  promises,  of  threatening  to  run  out  all 


40  HOW  TO  COOPERATE. 

other  stores  and  middlemen,  of  inaugurating  an  indus- 
trial revolution,  was  studiously  avoided. 

The  opposice-plun  was  adopted.  Everything  was  done 
quietly,  modestly,  unostentatiously,  but  with  confidence. 
The  cooperators  knew  what  they  wanted  to  do,  and  did 
it  with  as  little  noise  as  possible.  Satisfied  with  humble 
beginnings,  they  well  knew  that  their  reports  and  bal- 
ance sheet,  and  the  prices  and  character  of  their  goods, 
would  be  the  only  advertisement  the  association  would 
need.  This  plan  disarmed  opposition,  calmed  the  fears 
of  private  traders,  avoided  all  trouble  in  buying  goods, 
maintained  more  active  interest  on  the  part  of  the  mem- 
bers, and,  presto !  almost  before  the  public  knew  it  the 
cooperative  association  was  an  established  success. 

The  By-Laws  of  the  Arlington  association,  as 
drawn,  are  based  on  those  of  the  Rochdale  Pioneers, 
modified  by  the  practical  experience  of  some  of  the 
directors  in  cooperative  work  in  England,  and  by  their 
knowledge  of  the  different  conditions  in  this  country. 
While  the  by-laws  of  other  successful  associations  in  the 
United  States  (as  printed  in  the  Appendix)  vary  some- 
what from  the  Arlington  by-laws,  it  is  to  be  noted  that 
the  latter  have  been  the  regulations  under  which  the 
conspicuous  success  of  the  Lawrence  cooperators  has 
been  achieved.  These  by-laws,  as  revised  and  adopted 
Jan.  28,  1891,  are  here  printed  in  full : 

BY-LAWS  OF  THE  ARLIN^GTON  COOPERATIVE  ASSOCIATION 

Akticlk  I.    Name. 

Section  1.  Tliis  association  shaU  be  known  as  the  Arlington  Coopera- 
tive Association. 

Sec.  2.  Tlie  place  or  places  of  business  shall  be  at  such  location  or 
locations  as  the  association  may  from  time  to  time  determine.  AH 
books  of  account,  securities  and  documents  of  tlie  association,  otlier 
than  such  as  are  required  for  the  carrying  on  of  the  same  elsewhere, 
shall  be  kept  at  a  stated  general  office  at  Lawrence,  Mass. 

Akticle  II. 

The  object  of  this  association  is  to  carry  on  the  trade  of  general  deal- 
ers iniiousehold  supplies,  on  the  cooperative  plan. 


THE   COOPERATIVE   STORE.  41 


Article  III. 

Section  1.  Any  person,  upon  approval  of  the  board  of  directors,  may 
become  a  member  of  this  association,  after  being  proposed  by  a  mem- 
ber, paying  an  entrance  fee  of  ftfty  cents  and  signing  a  declaration 
of  his  readiness  to  take  at  least  one  share  of  stock,  and  willingness  to 
conform  to  the  by-laws  of  this  association.  Such  proposal  shall  give 
the  person's  name,  trade  and  address,  and  shall  be  signed  by  the  mem- 
ber making  the  proposal,  which  shall  be  sent  to  the  clerk  with  the 
entrance  tee  and  entered  by  him  in  a  book  kept  for  that  purpose.  If 
approved  by  the  directors,  he  shall  be  considered  a  member,  upon 
payment  of  at  least  one  dollar,  on  account  of  his  subscription  as  other- 
wise provided. 

Sec.  2.  Candidates  for  membership  rejected  by  the  directors  shall 
have  the  power  of  appeal  through  any  member  to  the  general  meet- 
ing. Any  person  rejected  shall  have  his  entrance  fee  returned  on 
application. 

Sec.  3.  At  the  general  office  a  list  of  members'  names,  trades  and  res- 
idences shall  be  kept,  and  no  person  shall  be  deemed  a  member  unless 
his  name  appears  on  this  list.  The  names  of  all  persons  who  under 
these  by-laws  cease  to  be  members  shall  be  erased  therefrom. 

Article  IV.    Fuxds  and  Revenues.. 

Section  1.  The  permanent  capital  of  this  association  shall  be  in 
shares  of  five  dollars  each.  Each  member  of  this  association  can  hold 
from  one  to  two  hundred  shares.  The  capital  of  the  association  shall 
be  invested  by  the  board  of  directors  in  purchase  of  stock  and  fixtures, 
agreeable  to  the  articles  of  agreement. 

Sec.  2.  From  the  absolute  profits,  after  paying  the  expenses  of  the 
association,  not  less  than  ten  per  cent  per  annum  shall  be  set  aside  for 
a  sinking  fund,  which  shall  be  allowed  to  accumulate  until  it  amounts 
to  a  sum  equal  to  thirty  per  cent  in  excess  of  the  capital  stock. 

Sec.  3.  Interest  shall  be  declared  on  the  capital  stock  at  the  rate  of 
five  per  cent  per  annum,  payable  quarterly.  The  directors  shall  at  any 
time  have  power,  with  the  sanction  of  the  quarterly  meeting,  to  reduce 
the  rate  of  interest. 

Sec.  4.  After  deducting  from  the  profits  the  amounts  provided  In 
Sections  2  and  3  of  this  article,  and  the  amount  assessed  as  State  and 
city  tax,  the  remainder  shall  be  divided  quarterly  in  proportion  to  the 
amount  expended  in  purchase  of  goods.  Non-members  will  receive  a 
share  of  the  profits  to  the  extent  of  one-half  of  that  given  to  members^ 

Sec.  5.  Receipts  from  entrance  fees  shall  be  added  to  the  sinking 
fund  of  the  association. 

Sec.  6.  Interest  will  commence  on  the  first  of  each  month  upon  all 
paid-up  shares. 

Sec.  7.  No  interest  will  be  paid  on  shares  withdrawn  before  the  end 
of  the  quarter. 

Sec.  8.  Dividends  and  interest  may  remain  to  the  credit  of  the  share- 
holders at  their  option,  and  whenever  such  accumulation  amounts  to 
the  par  value  of  one  share,  interest  shall  be  declared  according  to  the 
provisions  of  Sec.  6  of  this  Article,  provided  that  this  amount  with  that 
of  the  original  shares  invested  shall  not  exceed  the  par  value  of  two 
hundred  shares. 


42  HOW  TO   COOPERATE. 

Sec.  9.  Should  the  directors  find  that  they  have  more  cash  in  tlie 
treasury  tlian  tliey  can  profitably  employ  in  tlie  ordinary  business  of 
the  association,  tliey  may,  with  the  sanction  of  the  quarterly  meeting, 
Invest  any  such  portion  of  the  cash  in  such  manner  as  may  be  deemed 
advisable. 

Article  v.    Officeks. 

Section  1.  The  oflQcers  of  this  association  shall  consist  of  a  president, 
clerk,  treasurer,  and  ten  other  persons  who,  with  the  exception  of  tlie 
clerk,  shall  constitute  the  board  of  directors. 

Sec.  2.  The  clerk,  treasurer  and  eleven  directors  shall,  be  chosen 
annually  by  the  stockholders  by  ballot  and  shall  hold  their  office  for 
one  year,  and  until  others  are  chosen  and  qualified  in  their  stead ;  pro- 
vided that  it  shall  be  considered  requisite,  unless  they  may  be  other- 
wise disqualified,  to  re-elect  one-half  of  the  old  board  at  each  election. 
The  president  shall  be  chosen  by  the  board  of  directors  from  their 
number. 

Sec.  3.  Candidates  for  the  board  of  directors  and  all  other  officers  of 
the  association  shall  be  nominated  at  the  quarterly  meeting  imme- 
diately preceding  the  yearly  meeting  at  which  they  are  proposed  for 
election.  Should  the  number  nominated  not  be  sufficient  to  fill  the 
vacancies  the  yearly  meeting  shall  elect  the  required  number  not  so 
nominated. 

Sec.  4.    An  auditor  shall  be  chosen  annually  by  ballot. 

Sec.  5.  No  person  shall  be  eligible  for  the  office  of  director  who  has 
not  been  a  member  of  the  association  for  at  least  six  months,  or  be 
eligible  for  president  who  has  not  been  a  director  twelve  months,  or  if 
he  hold  any  other  office  or  place  of  profit  under  the  association ;  if  he  is 
concerned  in  or  participates  in  the  profits  of  any  contract  Avith  the 
association;  or  if  he  carries  on  the  same  business  as  the  association;  or 
if  he  has  a  relative  employed  by  the  association. 

Akticle  VI.    Duties  of  Officers. 

Section  1.  It  shall  be  the  duty  of  the  president  to  preside  at  all  meet- 
ings of  the  association  and  board  of  directors,  and  in  case  of  equal 
division  to  give  the  casting  vote,  besides  his  own  vote  as  a  member. 
He  shall  sign  all  documents  or  certificates  issued  by  the  association  or 
board  of  directors;  shall  hold  in  his  possession  the  bonds  of  the  treas- 
urer, or  any  of  the  employes  where  bonds  are  required,  and  shall 
perform  all  other  duties  usually  appertaining  to  his  office. 

Sec  2.  It  shall  be  the  duty  of  the  clerk  to  keep  a  correct  record  of  all 
business  meetings  of  the  association  and  board  of  directors,  and  in  case 
of  the  absence  of  the  president,  to  call  the  meeting  to  order.  He  shall 
keep  a  correct  record  of  the  names  and  residences  of  the  members,  and 
shall  serve  all  notices  ordered  by  the  board;  he  shall  carry  on  all 
correspondence  and  shall  attest  all  documents  issued  by  the  association 
or  board  of  directors,  and  shall  deliver  to  his  successor  in  office  all 
property  in  his  possession  belonging  to  the  association. 

Sec.  3.  It  shall  be  the  duty  of  the  treasurer  to  receive  all  moneys  due 
from  members  and  others,  and  to  disburse  the  same  in  payment  of 
claims  against  the  association  when  approved  by  an  advisory  com- 
mittee. He  shall  keep  such  records  of  business  transa<!tions  of  the 
association  not  otherwise  provided  for  by  the  board  of  directors,  and 


THE   COOPERATIVE   STORE.  43 


shall  make  a  full  and  complete  report  at  each  quarterly  meeting  of  the 
financial  condition  of  the  association.  He  shall  give  such  bonds  for 
the  faitliful  performance  of  his  duties  as  the  board  of  directors  may 
require,  and  shall  deliver  to  liis  successor  all  books,  money,  vouchers 
and  other  property  of  the  association  in  his  possession. 

Sec.  4.  It  shall  be  the  duty  of  the  auditor  at  the  close  of  each  quar- 
ter's business  to  audit  the  accounts  of  the  treasurer  and  other  officers, 
including  stock  on  hand,  demanding  for  this  purpose  any  information 
he  may  see  fit,  and  report  condition  of  same  at  the  quarterly  meeting. 

Article  vil.    Management. 

Section  1.  The  board  of  directors  shall  have  control  of  all  business 
carried  on  by,  or  on  account  of,  the  association,  the  purchase  and  sale 
of  goods,  the  engaging  of  managers  and  of  all  other  persons  necessary 
for  conducting  the  business,  providing  for  places  of  meeting,  the  rates 
of  payment  for  work  or  services  done  on  account  of  the  association! 
and  the  regulation  of  salaries  and  securities  of  the  managers  and 
employes,  to  whom  it  may  assign  such  duties  as  it  shall  deem  proper. 

Sec.  2.  The  board  of  directors  shall,  with  the  consent  of  a  general 
meeting,  have  power  to  lease,  purchase  or  erect  any  building  or  build- 
ings for  the  purpose  of  the  association,  and  to  mortgage,  rent  or  sell 
such  buildings  or  any  part  thereof. 

Sec.  3.  The  board  of  directors  shall  meet  every  alternate  Tuesday 
evening,  and  shall  provide  for  the  detailed  work  of  the  business  by  the 
appointment  of  sub-committees.  It  shall,  in  all  things,  act  for  and  in 
the  name  of  the  association,  and  all  acts  and  orders  under  the  powers 
delegated  to  it  shall  have  like  force  and  effect  as  if  they  were  acts  and 
orders  of  a  majority  of  the  members  of  tlie  association  at  a  general 
meeting  thereof.  Every  question  at  such  meeting  of  the  board  shall  be 
decided  by  a  majority  of  votes  cast.  Seven  members  of  the  board  shall 
constitute  a  quorum. 

Sec.  4.  The  president,  at  the  request  of  three  members  of  the  board, 
shall  call  a  special  meeting  thei-eof  by  giving  one  day's  notice  in  writ- 
ing to  the  clerk;  but  no  business  shall  be  taken  into  consideration 
other  than  that  specified  in  the  notice.  The  board  shall  convene  special 
meetings  of  the  stockholders  at  their  discretion,  allowing  three  days' 
notice  of  the  same. 

Sec.  5.  The  board  shall  cause  the  accounts  of  all  business  carried  on 
to  be  regularly  entereil  in  proper  books  and  a  quarterly  report  to  be 
made  out  covering  all  business  to  the  end  of  each  quarter  which,  lo- 
v;<-tlier  with  all  necessary  vouchers,  shall  be  submitted  to  the  auditor 
i:<it  less  than  seven  days  previous  to  such  meeting,  and  shall  be  printed 
.•iiid  distributed  to  the  nieml)ers  as  early  as  possible  tliereaft-er. 

Sec.  6.  All  n)eetings  of  the  board  of  directors  shall  be  open  to  the 
atteiidance  of  other  members,  but  no  such  member  shall  take  part  in 
its  discussions. 

Artic  LE  VIII.    Meetings. 

Section  1.  The  general  meetings  of  tills  association  will  be  held 
quarterly  on  the  last  Wednesday  of  January,  April,  July  and  October 
of  each  year. 

Sec.  2.  The  annual  meeting  of  this  association  for  the  election  of 
ofllcers  shall  be  held  on  the  last  Wednesday  of  April  of  each  year. 


44  HOW   TO   COOPERATE. 

Sec.  3.  The  president  sliall  cause  a  special  meeting  of  the  association 
to  be  called  upon  a  written  request  signed  by  ten  members  of  the 
association.  At  such  meeting  no  other  business  shall  be  transacted 
than  that  named  in  such  requisition. 

Sec.  4.  Notices  of  all  meetings  sliall  be  posted  by  the  clerk  in  a  con- 
spicuous place  in  the  store  or  stores,  three  days  previous  to  the  same. 
In  the  case  of  special  meetings,  such  notice  shall  state  the  object  of  the 
meeting. 

Sec.  6.  At  all  meetings  of  the  association  fifteen  members  shall 
constitute  a  quorum  for  the  transaction  of  business. 

Sec.  6.  No  subject  foreign  to  the  purpose  of  the  association  shall  be 
introduced  at  any  of  its  meetings  for  business. 

Article  IX.    General  Regulations. 

Section  1.  Quarters  shall  commence  on  the  first  of  January,  April, 
July  and  October. 

Sec.  2.  All  purchases  from  the  association  shall  be  made  strictly  for 
cash. 

Sec.  .3.  Each  member  of  the  associ.ition  shall  be  provided  with  a 
book  of  account  in  which  shall  be  entered  a  statement  of  shares  held 
with  quarterly  dividends  and  interest. 

Sec.  4.  Each  purchaser  shall  be  provided  with  checks  or  a  pass-book 
at  the  option  of  the  directors,  which  shall  show  the  amount  of  pur- 
chases on  which  dividend  will  be  declared.  The  same  to  be  returned, 
as  provided  from  time  to  time  by  the  board  of  directors. 

Sec.  5.  No  intoxicating  liquors  shall  be  allowed  on  sale  by  the 
association. 

Sec.  6.  Any  complaint  as  to  quality  or  prices  of  goods  sold  by  the 
association  or  respecting  the  conduct  of  any  of  its  employes,  should 
be  made  to  the  directors  in  writing,  signed  by  the  party  making  the 
complaint,  and  such  complaint  shall  be  investigated  and  decided  by 
the  board. 

Sec.  7.    All  sales  are  to  be  made  at  the  average  retail  market  price. 

Sec.  8.  Eacli  stockholder  shall  be  entitled  to  a  certificate  of  his  stock, 
under  the  seal  of  the  corjioration,  signed  by  the  president  and  the 
treasurer. 

Sec.  9.  No  stockholder  shall  be  entitled  to  more  than  one  vote  in  any 
business  meeting  of  the  association. 

Sec.  10.  The  board  of  directors  may  suspend  any  member  from 
participating  in  the  benefits  of  the  association  who  persists  in  conduct 
injurious  to  the  association,  until  it  shall  submit  the  matter  to  a  stock- 
holders' meeting,  giving  the  offender  three  days  notice  thereof,  which 
meeting  shall  confirm  and  extend  the  action  of  the  directors,  or  other- 
wise, as  it  may  think  proper. 

Article  X.    Withdrawals. 

Section  1.  Any  member  of  this  association  desiring  to  witlidraw  from 
the  association  the  whole  or  any  part  of  his  or  her  stock  shall  make  a 
written  application  to  the  directors,  and  within  thirty  days  from  the 
<late  of  such  application  the  board  shall  pay  or  cause  to  be  paid  such 
applicant  the  amount  of  shares  he  may  desire  to  withdraw;  but  if  the 
board  fall  to  pay  or  cause  tlie  same  to  be  paid  within  thirty  days,  said 
applicant  may  transfer  his  or  her  shares  to  any  other  member,  pro- 


THE   COOPERAtrVl:   STOllE.  45 

vided  the  member  lias  not  the  full  number  of  shares  allowed  in  the 
by-laws,  but  in  no  case  shall  he  transfer  his  share  to  persons  not  mem- 
bers of  the  association  unless  he  first  obtain  consent  of  the  board  of 
directors,  which  consent  shall  be  signed  by  the  president  and  clerk 
and  entered  on  the  records  of  the  association.  In  case  a  member 
transfer  his  share  or  shares  he  must  surrender  his  certificate  to  the 
board  of  directors,  and  the  board  shall  cause  a  new  certificate  to  be 
issued  to  the  person  to  whom  he  makes  such  transfer. 

Sec.  2.  Any  member  being  in  distress  may  withdraw  any  shares  he 
may  have  in  the  association  at  the  discretion  of  the  board  of  directors. 

Article  XI.    Amendments. 

These  by-laws  shall  not  be  altered  or  amended  unless  such  alteration 
or  amendment  be  proposed  in  writing  one  meeting  previous  to  action 
being  taken  thereon,  providing,  also,  that  two-thirds  of  the  members 
present  vote  in  the  affirmative. 

ABTICIiB  XII.     VACANCIES. 

In  case  of  a  vacancy  in  the  offices  of  clerk,  treasurer,  auditor,  or  any 
of  the  directors,  by  resignation  or  otherwise,  a  substitute  shall  be 
elected  at  the  next  quarterly  meeting,  or  at  a  special  meeting  called 
for  that  purpose. 

Akticle  XIII. 

That  the  duties  of  the  treasurer  be  so  modified  as  to  make  him 
simply  custodian  of  the  money  and  to  entail  no  other  bookkeeping 
than  a  simple  cash  account  and  signing  of  checks  and  certificates,  with 
a  true  rendering  of  said  account  when  called  upon.  That  the  duties 
of  the  clerk  be  made  to  include  all  bookkeeping  and  money  transactions 
with  the  members  required  by  the  a.ssociation,  as  well  as  all  present 
duties,  and  that  he  be  made  the  executive  officer,  under  the  directors, 
of  all  duties  assigned  by  them  from  time  to  time.  That  his  position 
be  sufficiently  remunerated  as  to  insure  a  perfectly  reliable  and  satis- 
factory incumbent  whose  whole  attention  can  be  given  to  the  calls  of 
the  association,  and  that  he  be  placed  under  equal  bonds  with  the 
treasurer. 

Strong  Points  of  These   By-Laws It  is  to  be 

noted  that  tliere  is  a  distinction  (Sec.  1)  between  a  mem- 
ber and  a  sliareholder.  Each  member  is  entitled  to  one 
vote  only  (Art.  I,  Sec.  9),  but  must  be  a  shareholder 
for  six  months  in  order  to  be  a  director  (Art.  V,  Sec.  5). 
The  proviso  that  the  president  must  have  been  previ- 
ously a  director  for  at  least  one  year  is  a  further  safe- 
guard to  secure  the  best  officers. 

The  compulsory  reelection  of  at  least  one-half  of  the 
directors  is  also  wise,  as  it  retains  the  most  efficient  men, 
and  guards  against  a  complete  overturning  by  the  share- 


46  HOW   TO    COOPERATE. 

holders.  Such  an  overturn  is  always  within  the  realm 
of  possibility,  but  must  be  guarded  against,  either  as 
specified  in  Sec.  2,  of  Art.  V,  or  perhaps  still  better  by 
electing  only  one-third  of  the  board  annually.  In  either 
case,  the  members  can  speedily  get  rid  of  poor  timber  on 
the  board,  but  must  keep  their  best  men.  It  is  usually 
well,  in  a  cooperative  society,  to  elect  occasionally  one 
or  two  new  members  to  the  directors,  for  it  is  an  honor 
every  shareholder  may  justly  aspire  to.  This  policy  also 
maintains  closer  interest  on  the  part  of  shareholders  and 
prevents  one  set  of  directors  from  getting  the  idea  that 
they  own  the  society.  The  best  men  on  the  board  never 
get  this  idea,  poor  sticks  do. 

It  is  possible  for  even  the  poorest  person  to  become  a 
shareholder  (Art.  Ill,  Sec.  1),  for  while  the  full  share 
costs  five  dollars,  only  one  dollar  is  actually  required 
down,  thus  entitling  the  member  to  the  full  dividend 
on  his  purchases,  which  is  placed  to  his  dividend  until 
it  amounts  to  five  dollars.  A.fter  that  the  member  can 
withdraw  his  dividends  or  leave  them  to  accumulate  to 
pay  for  more  shares.  The  articles  of  agreement  referred 
to  in  Art.  IV,  See.  1,  are  simply  the  declaration  filed  for 
the  purposes  of  incorporation. 

The  Sinking  Fund. — Sec.  3  of  the  same  article  com- 
pels the  accumulation  of  a  sinking  fund,  and  is  in  ac- 
cordance with  the  State  law  of  Massachusetts.  Such  a 
fund  should  be  insisted  upon,  however,  by  every  cooper- 
ative society,  even  if  the  State  law  does  not  require  it. 
Arlington's  sinking  fund  now  (June,  1891)  reaches  the 
handsome  amount  of  nearly  eight  thousand  dollars.  It 
is  not  withdrawable  and  cannot  be  taken  out  of  the  bus- 
iness except  upon  the  dissolution  of  the  association. 
The  larger  it  grows  the  more  interest  each  member  has 
in  the  association  in  addition  to  his  actual  holdings  of 
shares. 

We  cannot  impress  too  strongly  the  importance  of 
setting  aside  at  least  ten  per  cent  of  the  net  profits  for 


THE  COOPERATIVE    STORE.  47 

such  a  fund.  Particularly  must  this  be  insisted  upon  at 
the  start.  Increase  the  sinking  fund  instead  of  paying 
large  dividends.  Add  to  the  reserve  heavily  in  times  of 
prosperity.  Encroach  upon  it  only  as  a  last  resort  in 
dire  extremity. 

It  is  also  wise  to  adhere  to  five  per  cent  interest  on 
capital  except  in  sections  of  the  country  where  money  is 
so  valuable  that  a  higher  rate  will  be  only  equal  to  five 
per  cent  in  the  older  States.  Such  a  limit  as  is  specified 
in  Sec.  3  of  Art.  IV  is  wise  because  it  emphasizes  the 
fact  that  the  object  of  the  cooperators  is  saving  divi- 
dends on  their  purchases  or  goods  instead  of  paying  large 
interest  on  capital. 

Allowance  for  Depreciation. — Art.  IV,  Sec.  4, 
makes  no  proviso  for  charging  off  for  wear  and  tear  of 
fixtures  and  plant,  as  is  the  usual  plan  in  cooperative  asso- 
ciations. The  Arlington  directors  preferred  not  to  have 
this  specified  in  the  by-laws.  They  have  charged  off 
each  year  at  least  ten  per  cent  of  the  first  cost  of  fixtures 
for  depreciation,  but  find  it  more  convenient  to  do  this 
when  it  is  easiest  rather  than  be  compelled  to  charge  off 
each  quarter  one-fourth  of  such  sum.  In  nine  cases  out 
ten,  however,  directors  might  not  live  up  to  such  a  vote, 
so  that  the  by-laws  should  provide  that  during  the  year 
at  least  ten  per  cent  on  cost  should  be  charged  off  on  the 
fixture  account. 

We  want  to  emphasize  this  point,  for  a  society  can 
easily  deceive  itself  as  to  its  financial  position  by  not 
allowing  for  wear  and  tear.  Up  to  Oct.  1,  1890,  the 
Arlington  had  expended  for  fixtures  $10,811, — horses, 
wagons,  harness,  store  fixtures  and  all  appliances  used  in 
its  business  outside  of  goods  and  real  estate.  It  had 
allowed  for  depreciation  up  to  that  date  $3,192,  and  had 
sold  fixtures  to  the  amount  of  $157.  The  two  together, 
$3,349,  showed  the  total  reduction.  This  left  the  inven- 
tory value  of  the  fixtures  at  $7,461.     Now,  if  the  associ- 


48  HOW   TO   COOPERATE. 

jition  spends  11,000  for  fixtures  this  year,  the  account 
would  be  18,461  on  Oct.  1,  1891.  But  in  charging  off, 
the  11,000  would  be  added  to  the  first  cost,  making  a 
total  of  $11,811,  and  it  is  ten  per  cent  of  this  sum,  or 
$1,181  that  would  be  charged  off — not  $846.  It  takes 
nerve  to  do  this,  but  it  makes  this  asset  worth  far  more 
than  it  is  inventoried  at.  The  property  and  the  money 
is  all  there  and  the  association  gets  the  benefit  of  it. 
This  depreciation  must  always  be  allowed  for  before  div- 
idends are  declared.  The  policy  of  the  Arlington  di- 
rectors has  always  been  not  to  jeopardize  the  position  of 
the  association  for  the  sake  of  dividend,  but  to  solidify 
it  as  much  as  possible,  so  that,  in  case  of  any  unforeseen 
circumstances  arising,  they  may  always  have  a  good 
reserve,  and  a  good  leeway  in  the  depreciation  of  their 
fixtures. 

Educational  Fund — Neither  does  the  Arlington 
adopt  the  Eochdale  system  of  setting  aside  two  and  one- 
half  per  cent  of  its  net  (not  gross)  profits  for  the  educa- 
tional fund.  The  small  fund  already  accumulated  for 
this  purpose  was  derived  from  picnics.  If  a  society 
would  make  an  effort  to  hold  occasional  entertainments 
for  the  benefit  of  the  educational  fund  it  might  get 
more  money  for  this  purpose  than  the  two  and  one-half 
per  cent  net  would  amount  to.  This  plan  would  also  be 
of  great  value  in  keeping  up  the  interest  of  the  members 
and  in  promoting  and  adding  to  the  good  accomplished 
by  the  educational  fund.  If  the  members  make  some 
effort  to  earn  money  for  lectures,  literature,  etc.,  on 
cooperation  and  kindred  topics,  they  will  appreciate  such 
work  and  derive  more  benefit  from  it  than  if  it  were 
forced  upon  them. 

We  insist,  however,  upon  the  necessity  of  having  an 
educational  fund  and  using  it  properly.  Where  this  is 
neglected,  the  members  are  almost  sure  to  lose,  or  never 
comprehend,  the  true  cooperative  idea.     They  fail  to 


THE   COOPERATIVE   STORE.  49 

grasp  its  principles,  and  only  by  the  best  management 
will  their  patronage  and  support  be  secured.  On  the 
other  hand,  where  the  educational  work  is  well  followed 
up,  the  members  become  better  informed,  and,  after 
being  disciples,  soon  become  apostles  of  cooperation, 
advocating  it  enthusiastically  among  their  friends  and 
bringing  them  into  the  fold,  and  also  supporting  the 
store  and  upholding  the  officers  far  more  stanchly  than 
the  uninformed  member  ever  will  do. 

Other  Points. — Since  it  is  so  easy  for  persons  to 
become  members  it  may  be  asked,  why  not  omit  giving 
non-members  the  half  dividends  on  their  purchases.  It 
is  a  cheap  and  effective  way  of  attracting  custom  and 
inducing  people  to  join.  Payment  of  interest  only  on 
full  shares  and  paid-up  shares  and  commencing  only  at 
the  first  of  the  month  simplifies  accounts.  The  rule 
that  no  member  can  hold  more  than  two  hundred  shares 
prevents  the  centralization  of  capital  that  is  so  objec- 
tionable in  a  cooperative  enterprise. 

The  Officers. — The  by-laws  relative  to  officers  are 
specially  important.  Eleven  directors  and  the  treasurer, 
who  is  also  a  director,  making  a  board  of  twelve  mem- 
bers, are  chosen  annually  by  the  shareholders  by  ballot. 
This  board  elects  one  of  its  number  as  president,  but 
the  board  does  not  elect  the  clerk,  who,  according  to 
Art.  XIII,  is  the  chief  executive  officer  and  manager  of 
the  association.  This  important  official  is  elected  by 
the  stockholders,  and  is  amenable  only  to  them,  althougli 
he  works  under  the  supervision  of  the  directors.  This 
proviso  is  wise  and  useful  in  two  ways : 

First,  it  places  the  direct  representative  of  the  stock- 
holders' interest  in  active  control ;  second,  it  makes  him 
sufficiently  independent  to  be  free  from  any  undue  influ- 
ences that  might  be  attempted  by  a  "cranky"  director. 
On  tlie  other  hand,  the  powers  of  the  directors  (Art.  VII, 
Sec.  1)  are  all  that  could  be  desired.  The  duties  of  the 
4 


50  HOW  TO   COOPERATE. 

officers  are  clearly  explained,  but  Articles  VI  and  XIII 
should  be  considered  together  in  this  connection. 

The  giving  of  bonds  by  the  treasurer  and  clerk  (or 
manager)  and  heads  of  departments  is  also  a  measure 
that  should  always  be  insisted  upon,  as  it  imparts  confi- 
dence to  members  who  otherwise  might  be  suspicious. 
Equally  important  are  the  safeguards  (Art.  V,  Sec.  5) 
against  weighing  down  the  society  with  help  employed 
because  they  are  relatives  of  the  directors. 

Work  of  the  Directors. — All  would-be  cooperators 
should  carefully  study  Art.  VII,  on  management.  The 
value  of  frequent  meetings  of  the  directors  and  their 
active  supervision  of  the  society's  business  cannot  be  too 
strongly  urged.  Many  societies  have  failed  because  the 
directors  were  faithless  and  left  the  affairs  wholly  to 
the  manager.  There  is  a  constant  tendency  for  direct- 
ors to  neglect  their  duties,  especially  where  the  manager 
is  at  all  competent.     This  must  always  be  avoided. 

The  directors  should  each  and  all  be  so  conversant 
with  the  society's  affairs  that  any  one  of  them  can,  with 
a  little  experience,  fill  positions  that  might  become  va- 
cant suddenly.  Only  by  keeping  this  point  thoroughly 
in  view  can  a  society  avoid  the  fatal  mistake  of  depend- 
ing wholly  upon  one  man.  It  is  true  that  the  substantial 
success  of  the  Arlington  cooperators  is  very  largely  due 
to  its  efficient  clerk,  but  he  is  the  last  man  to  claim  it, 
and  has  always  been  first  and  foremost  in  developing 
employes  or  directors  who  can  step  into  the  breach  il' 
necessary.  But  it  is  to  be  kept  in  mind  that  no  business- 
can  be  run  by  a  board  of  directors ;  it  must  have  one 
executive  head. 

An  excellent  plan  to  insure  prompt  attendance  at 
meetings  of  the  directors,  and  their  committees  is  to 
print  on  each  quarterly  statement  a  report  of  the  whole 
number  of  meetings  held  during  the  year  or  quarter, 
putting  against  the  name  of  each   director  the  num- 


THE   COOPERATIVE    STORE.  51 

ber  of  meetings  that  he  has  attended.  Thns  the  share- 
holder can  see  at  a  glance  what  men  are  attending  to 
their  duties,  and  will  have  good  cause  to  remove  the 
tardy  ones  unless  some  valid  excuse  is  made  for  them. 

Frequency  of  Meetings.— Quarterly  meetings  should 
always  be  insisted  upon.  This  requires  a  quarterly  bal- 
ancing of  accounts,  a  quarterly  inventory  and  a  knowl- 
edge every  three  months  by  the  officers  and  members  of 
just  how  the  society  stands.  There  is  a  tendency  to 
have  semi-annual  meetings  and  reckonings,  and  in  some 
cases  annual  statements  and  meetings  only  are  called 
for.  It  is  argued  that  since  the  latter  is  sufficient  for 
the  ordinary  corporations  of  capitalists  it  ought  to  be 
enough  for  cooperators. 

There  are,  however,  two  reasons  for  quarterly  meet- 
ings, either  of  which  is  sufficient.  First,  they  bring  the 
members  together  and  inform  them  thoroughly  as  to  the 
progress  and  position  of  the  society  and  its  business; 
the  members  take  more  interest  in  Its  affairs,  and  have 
more  confidence  in  the  management  and  in  themselves. 
The  second,  an  equally  grave  reason,  is  that  the  quarterly 
reckoning,  balancing  and  inventory,  will  insure  against 
errors  and  losses  that  almost  inevitably  occur  when 
statements  are  made  up  only  semi-annually  or  once  a 
year. 

Even  under  the  simplest  system  of  bookkeeping,  the 
accounts,  particularly  those  of  the  members'  holdings 
and  intei'est,  are  liable  to  get  confused.  The  most  ex- 
pert bookkeepers  in  large  corporations  are  satisfied  only 
with  frequent  balancing  of  their  accounts.  Certainly  a 
cooperative  society  should  find  out  how  it  stands  at  least 
once  in  three  months,  for  it  often  does  not  employ  an 
expert  accountant. 

The  provisions  for  special  meetings  show  that  the 
whole  affairs  of  the  association  are  wholly  within  the 
reach  and  under  the  control'  of  the  rcembers, — a  point 
to  be  constantly  emphasized. 


52  now  TO    COOPERATE. 

The  General  Regulations. — Each  paragraph  in 
Art.  IX  is  a  model  of  brevity  and  a  diamond  of  coopera- 
tive truth. 

Business  can  be  done  strictly  for  cash,  as  is  shown 
by  the  experience  of  Arlington  and  other  cooperative 
societies.  No  cooperative  association  should  be  started 
except  on  an  absolute  cash  basis.  When  this  principle 
is  departed  from,  that  moment  the  germ  of  decay  be- 
gins to  develop  and  constantly  grows,  until  it  finally 
threatens  the  very  life  of  the  cooperative  society.  Once 
credit  is  allowed,  it  is  almost  impossible  to  correct  the 
abuse.  Some  associations  have  made  the  change,  and 
always  with  the  most  satisfactory  results  after  the  first 
"kick"  on  the  part  of  those  previously  trusted.  If 
there  is  one  thing  above  all  others  that  we  insist  upon, 
it  is  absolute  cash  transactions  from  the  start. 

The  most  practical  thing  cooperators  can  do  for  the 
temperance  cause  is  to  live  up  to  Sec.  5.  Sec.  10  is  also 
important. 

The  Banking  Features. — A  fundamental  difference 
between  the  cooperative  society  and  the  joint-stock  cor- 
poration is  that  the  holder  of  shares  in  a  joint-stock 
company  cannot  compel  the  company  to  buy  back  his 
shares.  He  takes  the  risk  on  them,  losing  if  business  is 
such  that  the  value  of  the  stock  sinks  below  par,  and 
gaining  if  the  returns  put  a  premium  on  the  stock. 

It  is  not  so  in  most  cooperative  societies,  although  in 
States  where  the  statutes  do  not  provide  for  this  point, 
shares  can  be  transferable  or  withdrawable  as  the  mem- 
bers may  specify  in  the  by-laws.  Usually,  however,  the 
people  who  invest  in  a  cooperative  society  must  have 
their  money  if  they  want  it.  They  must  have  the  priv- 
ilege of  receiving  the  cash  for  their  shares  if  they  actu- 
ally need  it.  Moreover,  the  capital  in  a  cooperative 
store  earns  a  fixed  rate  of  interest  only,  and  whatever 
profit  there  is  above  this  and  other  expenses  is  distribu- 
ted among  the  purchasers , 


THE   COOPERATIVE   STORE. 


53 


IWBHimmmh.-r 


miLWmW'Tm'i^'f''  -r  I  f   ^ 


m 


54  HOW   TO   COOPERATE. 

The  above  by-laws  provide  in  Art.  X  very  carefully 
for  the  rights  of  members  who  wish  to  withdraw  their 
capital  or  the  dividends  and  interest  that  is  placed  to 
their  credit.  It  will  be  observed  that  the  stock  is  not 
transferable  except  by  permission  of  the  directors,  but 
such  transfer  is  unnecessary  in  practice,  because  any  one 
who  wishes  to  sell  or  transfer  his  stock  can  surrender  it 
to  the  association  at  its  par  value  after  notice,  while  the 
same  can  be  re-issued  to  new  applicants.  The  legal 
limit  of  this  notice  is  thirty  days,  but  such  surrenders 
have  always  been  accepted  practically  upon  demand. 
So  long  as  this  condition  is  maintained,  it  is  impossible 
for  the  value  of  the  stock  to  be  either  more  or  less  than 
par.  Hence  the  stock  of  a  cooperative  society  on  this 
system  has  no  speculative  value,  and  the  only  reason  for 
withdrawing  is  lack  of  confidence  in  the  management  or 
necessity  for  the  money. 

The  cooperative  store  can  thus  do  a  regular  banking 
business  up  to  the  limits  of  its  would-be  capital.  This 
gives  the  store  cheap  capital,  enabling  it  to  keep  its  ex- 
penses down,  buy  goods  in  the  cheapest  markets,  and 
thus  insure  the  largest  possible  dividend  or  savings  to 
its  members. 

It  is  objected  that  this  withdrawal  clause  places  the 
business  at  the  mercy  of  the  shareholders,  since,  in  case 
of  a  stampede,  many  of  them  might  desert  it.  The 
directors,  however,  are  given  sufficient  power  to  avoid 
such  a  contingency,  while  at  the  same  time  the  with- 
drawal rights  of  mernbers  under  all  ordinary  circum- 
stances are  maintained.  When,  however,  a  society 
reaches  the  stage  at  which  the  members  all  want  to  get 
out,  it  will  make  little  difference  whether  its  shares  are 
withdrawable  or  not.  For  its  success  depends  upon  the 
management  and  the  confidence  the  members  have  in 
the  management. 

The  Value  of  By-Laws. — We  may  add  right  here 
that  while  model  by-laws,  such  as  those  of  the  Arlington 


THE  COOPERATIVE  STORE.  66 

association,  are  highly  important,  no  perfection  in  this 
respect  will  make  up  for  lack  of  management.  That  is 
the  real  thing  upon  which  success  depends.  Good  by- 
laws and  a  few  rules  lived  up  to  are  well  enough  in  their 
way,  but  thorough  businesslike  management  is  the  only 
thing  that  will  insure  success. 

Coupled  with  this  should  be  a  proper  attention  to 
their  duties  and  privileges  on  the  part  of  each  member. 
Each  shareholder  must  do  his  part  to  achieve  the  best 
success.  He  should  stand  by  the  SQciety,  give  it  all  his 
custom,  bring  in  new  members,  and  promote  the  coop- 
erative idea  among  all  with  whom  he  comes  in  contact. 
So  fully  is  this  appreciated  by  some  of  the  Arlington 
cooperators  that  they  deem  it  sacrilege  to  buy  elsewhere 
anything  they  can  get  at  the  "Coop,"  while  one  family 
that  holds  many  shares  has  much  company  so  as  to  eat 
more  groceries  and  add  to  the  "divi"  (dividend) ! 

Members  are  encouraged  to  invest  their  dividends  and 
interest  in  more  shares,  rather  than  draw  it  out.  By 
the  latter  plan,  the  member  usually  spends  his  savings 
and  has  nothing  to  show  for  them,  whereas,  by  putting 
them  into  the  business  he  gets  five  per  cent  net  on  all 
he  saves.  How  much  these  savings  may  be  in  a  year  is 
shown  by  the  dividends  of  five  shareholders  selected  at 
random— 1216.35,  $134.58,  $162.71,  $174.46,  $118.51. 
These  are  very  substantial  savings,  the  more  so  since 
none  of  the  members  of  each  of  these  five  families  prob- 
ably earn  over  six  to  twelve  dollars  per  week. 

The  Growth  of  the  Arlington  Association. — 
Long  before  the  end  of  three  years,  the  business  at  Law- 
rence outgrew  the  small  building  in  which  it  was  started. 
A  desirable  lot  was  secured  on  Holly  street,  and  a  cheap 
but  spacious  and  substantial  building  was  erected  for  a 
central  store,  illustrated  in  Fig.  4.  The  lot  was  large 
enough  to  permit  of  a  stable  and  horse  shed  in  the  rear. 
A  fine  basement  was  constructed  under  the  main  build- 


56  HOW  TO  CO6PERATE. 

ing  and  provided  with  steam  heating  apparatus,  a  large 
refrigerator,  etc.  The  whole  building  was  planned  to 
do  a  large  business  for  the  least  possible  work  and  ex- 
pense. Two  years  later  Branch  store  No.  1  was  opened, 
— Jan.  5,  1889;  this  is  rented.  About  the  same  time 
the  expensive  coal  and  wood  yards,  illustrated  on  Page 
66,  were  secured.    Just  before  Christmas  in  the  same 


Fig.  6.   bbanch  No.  1,  ABUKaTOK  C!o3pebative  Association. 

year  Branch  No.  2  was  opened,  it  being  owned  by  the 
association.  A  large  addition  is  soon  to  be  made  to 
Branch  No.  1,  but  the  association  built  Branch  No.  2, 
which  is  designed  to  accommodate  a  much  larger  busi- 


THE   COOPERATIVE  STORE.  57 

ness,  if  necessary,  by  removing  the  tenant  on  the  first 
floor  adjoining  the  store.  The  association  employs 
twenty-four  men,  three  women,  twelve  horses,  seven 
delivery  wagons  and  seven  coal  and  wood  wagons,  also 
nine  sleighs.  The  clerk  and  manager  is  the  only  salaried 
official,  the  president  and  directors  being  proud  to  labor 
for  the  good  of  the  cause  and  the  honor  of  the  position 
(this  honor  is  very  highly  esteemed),  though  of  course 
their  expenses  are  paid  when  they  go  ofE  on  business  for 
the  association. 

How  the  Store  is  Run. — The  goods  are  bought  in 
the  cheapest  markets,  at  the  right  times,  and  in  the  largest 
possible  quantities.  One  man,  (James  A.  Coghlin) 
buys  most  of  the  groceries,  but  the  other  purchases  are 
mostly  made  by  the  clerk.  Advantage  is  taken  of  every 
discount  for  cash,  and  in  other  respects  efforts  are  made 
to  buy  on  the  best  terms.  Thus,  this  spring  the  associ- 
ation bought  three  thousand  tons  of  coal,  before  the 
price  was  advanced.  It  was  delivered  by  the  train  load, 
and  every  member  of  the  association  was  proud  to  feel 
that  he  was  a  part  owner  in  this  large  business.  The 
purchases  and  details  of  the  business  are  conducted  with 
the  assistance  of  an  advisory  committee  consisting  of 
three  directors,  who  meet  weekly,  and  two  of  whom  at 
least  must  approve  all  bills  and  vouchers,  which  must 
also  be  approved  by  the  clerk.  Thus  the  cooperative 
principle  of  united  effort  and  active  supervision  is  con- 
stantly practiced. 

Bills  for  all  purchases  are  paid  by  bank  checks,  which 
are  signed  by  the  treasurer  and  countersigned  by  the 
clerk.  The  heads  of  the  different  stores,  who  receive 
the  goods  and  sell  them,  do  not  know  what  they  cost  or 
how  much  was  bought.  The  buying  is  a  department  of 
itself,  and  is  not  done  by  those  who  make  the  sales. 
Thus  there  can  be  no  collusion  between  the  employes  to 
defraud  the  association  in  the  transaction  of  its  business. 


68  HOW  TO   COOPERATE. 

neither  can  the  buyer  ''monkey"  with  the  funds,  since 
goods  are  paid  -for  on  receipt  of  bill,  which  has  to  be 
approved  by  the  advisory  committee  and  paid  by  check. 
Moreover,  the  goods  received  have  to  be  up  to  the  quan- 
tity and  quality  called  for  by  the  buyer  and  by  the  bills. 
Other  societies  should  profit  by  this  example. 

The  employes  are  young,  active  men  who  are  well  paid 
and  whose  pay  is  advanced  as  they  prove  their  worth. 
The  idea  that  the  cooperative  store  is  a  good  place  for 
the  relatives  of  its  officials  to  obtain  ''soft  jobs"  does 
not  prevail  with  the  Arlington  cooperators.  How  well 
this  important  point  is  guarded  may  be  seen  from  Art.  Y, 
Sec.  5,  particularly  its  concluding  clause.  No  favor- 
itism is  shown,  but  every  employe  stands  on  his  own 
merits.  Any  other  method  is  unbusinesslike,  improper, 
unjust,  idiotic. 

To  Become  a  Member  the  applicant  fills  out  the 
blank  form  on  the  opposite  page,  which  is  obtained  at 
the  stores. 

When  voted  in  by  the  directors,  a  pass  book  is  given 
the  member,  into  which  all  subscriptions  to  the  capital 
stock  will  be  entered.  The  pass  book  is  four  by  six 
inches  in  size,  containing  eight  ruled  pages.  The  first 
cover  page  bears  this  inscription  :  "Arlington  Coopera- 
tive Association,  organized  Jnly  8,  1884.     Stockholder's 

account.  No Always  bring  this  book  with  you 

when  you  desire  to  do  business  with  the  treasurer." 
The  third  page  of  the  cover  contains  Sections  3  to  9 
inclusive  of  Article  VI  of  the  by-laws  relating  to  interest 
and  dividends.  The  first  ruled  page  is  headed  :  "No.  .  . 
Arlington  Cooperative  Association,  Dr.,  to ." 

We  will  now  suppose  that  the  member  wishes  to  make 
a  purchase.  He  comes  to  the  store,  buys  what  he  wants, 
pays  cash  for  it  and  gets  a  yellow  check  for  the  amount 
from  the  storeman  of  whom  he  buys,  together  with  the 
storeman's  memorandum  of  article  and  amount.     This 


THE  COOPERATIVE  STORE.  59 

[FRONT.] 

The  Arlington  Cooperative  Association. 

To  THE  BOAED   OF  DiEECTOBS  : 

3Ir 

{Occupation), 

{Address), 

leing  desirous  of  joining  this  Association,  I  {a  duly  rec- 
ognized member)  hereby  recommend  that  he  be  accepted  by 
the  Board  as  a  member,  and  I  hereby  enclose  fifty  cents 
initiation  fee. 

{Signed) 

Date {Address), 


Mis  is  to  certify  that  I  wish  to  take  at  least  One  Share 
of  Stock  in  the  Arlington  Cooperative  Association,  and 
will  agree  to  conform  to  the  By-Laws  of  the  Association, 
if  accepted. 

Signed, . 

[BACK.] 

77iis  is  to  certify  that  the  applicant  herein  proposed  for 
membership  in  the  Arlington   Cooperative  Association 

was by  the  Board  of  Directors 

at  their  meeting  held 

Signed, 

Cleric. 


Note.— After  being  accpted  by  the  Board,  it  will  be  necessary  for  the 
applicant  to  pay  over  at  least  one  dollar  to  secure  the  credit  of  mem- 
bership on  the  books  of  the  A.ssociation.  As  soon  as  the  amount  is 
paifl  in  by  instalments,  or  otherwise,  amounts  to  ^5.00,  or  tlie  dividend 
credited  on  purchases  reaches  this  amount,  the  subscriber  is  entitled 
loa  Certificate  for  one  Share  of  .Stock;  and  may  thereafter  withdraw 
full  dividend  on  subsequent  purcliases. 


60  HOW  TO   COOPERATE. 

yellow  check  issues  from  one  of  the  popular  cash  regis- 
tering machines,  and  contains  in  black  ink  a  statement 
of  the  amount  of  the  purchase,  also  the  number  of  the 
check.  An  almost  invisible  punch  of  the  letters  A.  C.  A. 
(Arlington  cooperative  association)  is  also  made  on  each 
check.  The  paper  is  a  special  kind,  not  used  elsewhere 
in  town.  It  is  therefore  almost  impossible  to  counter- 
feit the  checks,  as  the  punch  and  the  paper  guard 
against  this,  while  the  numbering  is  a  further  safeguard, 
any  counterfeit  being  revealed  by  a  repetition  of  the 
number,  or  bearing  a  different  number  from  any  issued 
during  the  quarter. 

Where  a  store  is  starting  on  such  a  small  scale  that  it 
cannot  afford  a  cash  registering  machine,  little  paste- 
board or  metal  checks  with  the  name  of  the  association 
and  5,  10,  20  and  50  cents  printed  on  them,  can  be  used. 
The  cash  registering  machine's  check  is  by  far  the  best 
thing  out,  superior  even  to  the  long  tried  but  more  com- 
plicated systems  in  England.  The  register  and  the 
storemen's  duplicate  of  memorandum  furnished  custom- 
ers have  to  tally ;  thus  honesty  is  insured.  These  pur- 
chasers' checks  are  brought  in  and  exchanged  for  divi- 
dend checks  of  five  dollars  each  ;  two  dollars  or  one  dol- 
lar checks  are  also  given  for  sums  less  than  fiye  dollars. 
These  dividend  checks  are  like  this  : 

^^C^^i5&3&5£SCii£iX*5C*5C!t5«'5C-/'   "^^C^Xi^^^iX-i-X-iX-^viJ^i^ciSCiJ^  ^^4i5&Xi5ii5G5^»55i5CJ5Ci55i5£'5€<' 

^^vS^^nS^S^^/^K^n^^^/t^/SS^^i*     *^^/^/^A^/i!S/i>S/S^n3S^SS/3>/S^/^^    <y^^^^iS»N^S^«kMSS^aS^SS^iM^/S^ 

lRLINGTON  §  ig  ARLINGTON  §  1  ARLINGTON  § 

^_„  j-op.Associat'n| 
'^. -^    9-^.uu.     if     $i.oo.     i 

M  m   Return  thit  Check   m  m    Return  tlils  Check   m 
^  m  Quarterly.  m  m  Quarterly.  Jg 

Not  more  than  twenty  dollars  in  small  checks  will  be 
exchanged  in  any  one  day  for  one  person, — a  regulation 
that  is  strictly  enforced  for  the  convenience  of  the  store 
men.  Otherwise  it  would  be  a  good  deal  of  work  for 
them  to  exchange  the  checks  for  the  heavy  purchasers. 


THE  COOPEEATIVE   STORE.  61 

Many  goods  have  to  be  delivered  at  the  members'  houses, 
but  this  is  done  very  cheaply,  the  orders  being  collected 
in  the  morning  and  the  goods  delivered  in  the  afternoon. 
A  yellow  check  for  the  amount  accompany  the  goods  to 
each  purchaser,  which  is  surrendered  only  for  cash. 

On  the  date  advertised  for  the  receiving  of  check?, 
the  checks  for  dividend  (as  illustrated  above)  and  the 
members'  pass  books  are  presented  at  the  clerk's  desk, 
and  a  receipt  given  for  the  same  as  follows  : 

ARLINGTON     COOPERATIVE     ASSOCIATION. 

No.  of  Book 

Quarter  ending,  Dec.  31,  1890. 

RECEIVED  the  above  number  Pass  Book,  also  Checks 

amounting  to  % . 

GEO.  DEWHIRST,  Clerk. 


The  Quarterly  meeting  will  be  held  in  the  Caledonian  Hall,  on 
Wednesday,  January  28th,  at  7.45  p.  m. 

The  Pass  Books  will  be  ready  and  dividends  for  this  quarter  paid  as 
follows :  On  Friday,  Jan.  30.  at  Central  store,  from  2  to  8  p.  m.,  on  Sat- 
urday, Jan.  31,  at  Branch  store.  No.  2  Hancock  street,  from  12  m.,  to  2.30 
p.  m.,  and  at  Branch  store.  No.  1  Lawrence  street,  from  3  to  8  p.  m. 

No  withdrawals  of  sluire  capital  will  be  paid  during  the  time 
appointed  for  paying  dividends. 

If  the  party  presenting  checks  is  a  non-member,  he 
gets  a  receipt  like  this : 

ARLINGTON     COOPERATIVE     ASSOCIATION. 

NON-MEMBER'S     RECEIPT. 


Received  of. 

Checks  amounting  to  $ 

Date 

GEO.  DEWHIRST,  Clerk. 


'This  Cheek  must  be  preaetUnd  hi/  the  ]i(irty  collccluuj  IHvldend. 


62  HOW    TO   COOPERATE. 

The  amount  of  the  dividend  to  which  he  is  entitled  is 
then  entered  in  his  pass  book,  also  the  amount  of  inter- 
est due  on  his  shares  during  the  quarter,  and  the  pass 
book  is  returned  to  the  member.  This  record  is  taken 
from  the  convenient  "summary  book"  of  the  stock' 
holders'  ledger.  The  matter  is  thus  very  simple  for  the 
member,  and  expeditious  for  the  clerk. 

The  Directors'  Meetings. — The  directors  attend 
to  details  by  committees.  The  principal  one  is  the  ad- 
visory committee,  which  has  charge  of  the  general  busi- 
ness. Uliere  is  another  on  real  estate.  Special  commit- 
tees are  appointed  for  special  duties.  The  advisory 
committee  is  the  most  important  a  store  can  have,  as 
before  it  come  all  complaints,  changes  of  staff,  etc. 

I  attended  a  meeting  of  the  directors  early  in  the 
spring  of  1891.  They  were  nearly  all  present — solid, 
substantial,  intelligent  looking,  practical  working  men, 
some  more  successful  than  others  financially,  but  all  of 
good  judgment.  The  meeting  was  called  to  order  by 
President  Speed,  the  clerk  taking  a  record  of  those  pres- 
ent. The  minutes  of  the  last  meeting  were  read  and 
accepted.  A  very  complete  cash  statement  for  the  two 
weeks  ending  that  day  was  then  read  by  the  clerk.  It 
showed  the  receipts  and  expenses  for  each  department 
and  each  store,  and  compared  this  data  with  the  corre- 
sponding two  weeks  of  the  previous  year.  In  every  case 
there  was  a  handsome  increase,  which  the  directors  com- 
mended and  were  pleased  at  such  progress.  They  con- 
sidered a  few  points  of  the  report,  which  showed  them 
just  how  the  sales  and  expenditures  stood,  and  then  ac- 
cepted it.  The  clerk  then  read  off  a  long  list  of  applica- 
tions for  membership.  Some  of  these  provoked  inquiry 
as  to  just  who  the  parties  were,  in  what  part  of  the  city 
they  lived  and  which  store  they  would  be  served  from, 
etc.  Then  all  were  accepted  by  one  vote.  A  few  appli- 
cations for  withdrawal  of  stock  were  then  acted  upon. 


THE   COOPERATJVE   STORE. 


63 


The  records  of  the  meetings  of  the  advisory  committee 
since  the  last  meeting  of  the  directors,  which  are  also 
kept  by  the  clerk,  were  read  by  him.  These  records 
showed  just  what  the  committee  had  done,  and  contained 
a  few  suggestions,  which  the  board  proceeded  to  discuss, 
after  which  the  records  were  approved.  The  records 
included  a  mention  of  the  members  of  the  committee 
present  at  each  meeting,  so  that  the  directors  could  see 


Fig.  6.    Branch  No.  2,  Arlington  Coopkratfvk  association. 

how  thoroughly  they  attended  to  business.  It  was  a})- 
parent  that  while  the  directors  had  implicit  confidence 
in  their  manager,  both  he  and  they  insisted  upon  a  full 
statement  of  affairs  twice  a  month.  This,  with  a  careful 
audit,  keeps  both  directors  and  shareholders  well  posted, 
and  gives  them  confidence  in  the  association — an  impor- 
tant point. 

These   regular    matters  out  of    the   way,    the   clerk 
brought  up  the  question  of  buying  sugar  and  one  or  two 


64  HOW   TO    COOPEBATE. 

other  minor  matters,  upon  which  an  interchange  of 
opinion  was  expressed  and  the  matters  were  acted  upon 
by  vote  or  referred  to  the  clerk  or  to  the  advisory  com- 
mittee. The  business  meeting  then  adjourned,  and  an 
informal  discussion  of  the  cooperative  movement  fol- 
lowed. The  conversation  showed  how  thoroughly  the 
directors  have  mastered  the  principles  of  the  subject, 
and  the  careful  way  in  which  they  considered  certain 
suggestions  about  widening  their  operations  showed  busi- 
nesslike caution,  and  indicated  how  well  they  had 
learned  the  lesson  that  they  should  grow  only  as  fast  as 
their  means  and  experience  permitted,  avoiding  every- 
thing of  a  speculative  or  risky  nature. 

The  Taking  of  Stock. — All  stores  are  closed  one 
day,  at  the  end  of  the  quarter,  for  the  purpose  of  taking 
stock.  Every  article  of  merchandise  in  the  different 
stores  is  counted,  measured  or  weighed  by  the  employes 
in  charge  of  the  respective  departments,  who  make  a 
report  on  slips  of  paper  as  to  the  amount  of  each  article. 
Then  the  clerk  and  auditor,  with  the  manager  of  the 
store,  go  through  the  goods  to  see  that  the  amount  on 
hand  verifies  the  quantity  reported  by  the  inventory. 

The  clerk  and  auditor  are  the  ones  who  put  the  price 
on  each  article  in  the  inventory.  The  value  allowed  is 
what  the  goods  cost,  unless  the  market  price  is  lower, 
when  a  corresponding  reduction  is  made,  but  in  no  case 
are  the  goods  valued  above  cost,  however  much  the  mar- 
ket on  them  may  have  advanced.  These  values  are 
made  up  from  the  clerk's  accounts  and  bills,  under  the 
immediate  supervision  of  the  auditor.  In  this  way  the 
inventory  is  taken  both  quickly  and  accurately,  in  one 
day  for  all  the  stores.  There  can  be  no  mistake  as  to 
the  quantity  or  character  of  the  goods  on  hand,  while 
the  value  of  the  same,  being  taken  from  the  association's 
accounts  and  bills,  instead  of  being  put  on  by  the  em- 
ployes, who  might  be  careless  about  it,  are  always  on  the 


THE   COOPERATIVE    STORE.  65 

safe  side.  In  all  cases  the  value  is  put  low.  Few,  if 
any  stores  run  by  private  capital  take  so  careful  and  con- 
servative an  inventory.  In  this  respect  also  the  example 
of  the  Arlington  should  be  carefully  imitated.  There  is 
no  way  by  which  a  cooperative  store  can  deceive  itself  as 
to  its  condition  more  readily  than  by  swelling  the  inven- 
tory. It  must  be  put  down  to  hard-pan  and  kept  there. 
In  addition  to  this  a  suitable  allowance  should  be  made 
for  depreciation  in  the  value  of  fixtures, — store  furni- 
ture, scales,  wagons,  etc.,  as  mentioned  on  Page  47. 

Auditing  the  Accounts. — The  great  danger  with 
most  cooperative  stores  is  that  the  auditing  is  shirked. 
It  is  seldom  thoroughly  done.  The  auditor  usually  goes 
through  the  books  in  a  perfunctory  way,  and  sees  that 
the  totals  balance.  If,  later  on,  it  transpires  that  the 
accounts  are  not  correct,  the  auditor  is  usually  quite  as 
much  surprised  as  the  other  members.  Now  the  Arling- 
ton association  does  not  approve  of  any  such  slipshod  or 
unbusiness-like  method.  It  not  only  insists  on  a  careful 
and  complete  auditing  of  its  books  and  accounts,  but  it 
is  fortunate  in  having  an  auditor  who  knows  how  to  do 
it  and  who  takes  an  interest  in  the  work. 

Yet  this  gentleman,  George  Hartley,  is  not  an  expert 
bookkeeper,  or  one  whose  business  has  specially  qualified 
him  for  such  work.  He  is  a  plain,  substantial  working 
man,  who  has  made  his  way  from  the  spinning  frame  to 
be  assistant  overseer  in  one  of  the  departments  of  the 
mills.  But  he  has  a  complete  knowledge  of  the  cooper- 
ative movement,  appreciates  the  importance  of  a  thor- 
ough audit  and  has  learned  how  to  do  the  work  properlv. 
Having  learned  how  to  do  the  work  while  the  business 
was  small,  he  has  developed  with  it.  The  same  would 
be  true  of  auditors  in  similar  enterprises.  The  great 
point  to  be  noted  here  is  that  the  very  first  audit  made 
was  searching  and  complete — a  policy  that  has  since 
been  maintained.  Nothing  is  taken  for  granted.  It  is 
6 


66 


HOW  TO  COOPERATE. 


far  easier  to  enter  upon  this  policy  at  the  start  than  to 
inaugurate  it  after  a  cooperative  society  has  gone  wrong. 
The  accounts  being  finally  balanced,  the  books  are 
handed  over  to  the  auditor.  In  making  the  audit,  Mr. 
Hartley  first  goes  through  the  inventory,  checking  the 
prices  and  amounts.  He  then  goes  through  the  books 
very  carefully,  checking  up  the  vouchers  for  all  expendi- 
tures and  seeing  that  they  are  properly  posted  to  the 
different  accounts,  and  that  the  various  accounts  and 
cash  balance.  In  the  course  of  business,  every  bill, 
(after  approval  by  at  least  two  of  the  three  members  of 


i  X  ■■ 
I 


FIG.  7.    Aklington'8  Coal  and  Wood  yard. 

the  advisory  committee  and  by  the  clerk)  is  numbered 
and  entered  in  the  journal  with  a  corresponding  number. 
The  vouchers  being  arranged  in  rotation,  can  be  quickly 
checked  up.  Special  care  is  exercised  in  auditing  ac- 
counts witli  shareholders.  A  ledger  account  is  kept 
with  each  member,  which  is  duplicated  in  his  pass  book, 
as  it  is  returned  quarterly  to  be  written  up  from  the 
ledger.  The  association  also  has  a  summary  of  this 
shareholders'  ledger,  which  makes  it  comparatively  easy 
to  audit  these  accounts.  This  system  is  the  one  adopted 
by  tlie  cooperative  society  at  Leeds,  England,  the  largest 
in  the  world.  It  is  best  explained  by  example ;  hence 
we  insert  here  the  following  instances : 


THE  COOPERATIVE   STOBE. 


67 


Four  Sample  Accounts  From  the  Shareholders'  Ledger. 

No.  OF  Account,  102. 


Dr. 


April   1 

"     27  Cash  . . . . 
Interest. 


July  1,  Int.  and  Div., 


Cr. 

.$30.00 

.    25.00 

12 

$55.12 
.     7.54 


No.  of  Account  103. 


Dr. 

April  30  To  cash $100.00 

Balance 41.81 


$141.81 


April 

Int.  and  Div.. 


July 

Int.  and  Div., 


Or. 

$135.17 
.       6.64 

$141.81 

.     41.81 
.       5.54 


No.  OF  Account  104. 


Dr. 


April  1 

Int.  and  Div.. 


July  1,  Int.. 


Cr. 

.$42.00 
.     8.00 

$50.00 
62 


No.  of  Account,  110. 


Dr. 


April  1. 


Cr. 

.$5.06 


These  accounts  appear  as  follows  in  the  summary 
book,  their  accuracy  proving  themselves  by  balancing  of 
totals  and  references  to  the  last  quarter.  By  this  system 
it  is  practically  impossible  for  a  careful  audit  to  fail  to 
find  errors,  if  any  occur,  in  the  shareholders'  accounts. 


The  Above  Accounts  as  Entered  in  Summary  Book. 


c 

.§ 
1 

|o 

$30.00 

05 

•8 

1 

1^ 

^1 

•5 

1 
1 

102 

$26.00 

$0.12 

$55.12    .?0.54 

$100 

7% 
$7.00 

$7..54 

102 

103 

13,5.17| 

0.64  $100.00 

41.81         ..W 

72 

5.04 

5.54 

103 

104 

42.00 

8.00 

50.00        .62 

62 

104 

110 

5.061 

5.06        .06 

33 

2.31 

$2.37 

110 

68  HOW  TO   COOPERATE. 

The  Quarterly  Statement. — Before  the'  accounts 
are  finally  closed,  a  draft  or  trial  balance  is  submitted  to 
the  directors  for  their  approval  and  declaration  of  divi- 
dends. This  statement  to  the  directors  is  much  more 
complete  and  in  detail  than  is  given  in  the  published 
report  furnished  to  the  shareholders.  Tlie  reason  of 
this  is  that  the  oflBcers  do  not  care  to  help  their  compet- 
itors by  unnecessarily  giving  away  their  own  business. 
After  the  auditing  is  completed,  and  the  quarterly  state- 
ment as  finally  made  up  is  signed  by  the  auditor  and 
clerk,  it  is  again  presented  to  the  directors  in  the  form 
in  which  it  is  to  be  printed.  They  then  approve  it  and 
decide  how  many  shall  be  issued.  It  is  printed  and  is 
distributed  to  the  members  two  or  three  days  before  the 
quarterly  meeting.  A  sample  of  this  balance  sheet  and 
clerk's  statement  is  given  below.  We  commend  it  as  a 
model  in  its  way,  and  advise  every  cooperative  association 
to  follow  this  form  of  making  reports.  It  is  not  only 
plain,  so  that  any  member  can  understand  it,  but  it  is 
also  an  accurate  and  business-like  combination,  which 
cannot  be  said  of  the  reports  of  most  cooperative  socie- 
ties, which  frequently  sacrifice  accuracy  in  an  attempt 
to  be  plain.  The  quarterly  statement  is  printed  in  clear 
type  on  a  four-page  leaflet,  each  leaf  being  eight  and  one- 
half  by  eleven  and  one-half  inches  in  size.  It  is  re- 
printed by  pages,  and  its  style  imitated ; 


THE   COOPERATIVE   STORE.  69 

[First  page.] 

ARLINGTON     COOPERATIVE     ASSOCIATION. 

Lawrence,  Mass. 

CENTRAL   STORES,  475  AND  477  BROADWAY. 

BRANCH    NO.    1,   19  AND    21    LAWRENCE    STREET. 

BRANCH  NO.   2,   17  HANCOCK  STREET. 


Twenty-sixth  quarterly  statement  of  the  Arlington  cooperative 

association,  as  presented  to  the  members  at  the  quarterly 

meeting  held  April  29,  1891,  at  the  Caledonian  hall, 

Brechin  block. 


Fellow  Members  : — Your  Directors  have  pleasure 
in  submitting  the  following  results  of  the  quarter's  busi- 
ness : 

(  Central  store $15,034  86 

Cash  sales  of  merchandise :    { Branch  No.  1 11,306  97 

(  Branch  No.  2 6,028  53 

$32,370  36 

Fuel  (coal  and  wood) 7,208  79 

Dry  goods 3,419  24 

Boots  and  shoes  (Lord  Bros,  and  Robert  Barker) 4,131  67 

Clothing  ( W.  H.  Gile  &  Co.) 3,312  82 

Stoves  and  Tinware  (Wm.  Forbes  &  Sons) 168  54 

Dry  goods  (R.  M.  Cross  &  Co.) 1,656  15 

$52,267  57 
Non-members'  checks  returned,  entitled  to  one  half 

dividend $  1,613  00 

Members'  checks  returned 58,413  00 

Total $60,026  00 

As  shown  by  the  clerk's  statement  herewith  we  real- 
ized a  gross  profit : 

On  total  sales  made,  of $10,141  73 

Deducting  salaries,  interest,  and  expenses 6,524  59 

We  have  a  net  profit  of $4,617  14 

Which  your  directors  have  distributed  as  follows  : 

Members'  full  dividend,  $92  at  8  per  cent  (omitted 

last  quarter),  $58,321  at  7  per  cent $4,089  73 

Non-members'  dividend,  3  1-2  per  cent 56  45 

Amount  carried  to  sinking  fund  to  balance  above 470  86 

$4,617  14 
Our  sales  during  the  quarter  show  an  increase  over  tlie  cor- 
responding period  of  last  year  of $9,165  79 

And  net  profits  of 1,157  40 

During  the  quarter  our  net  gain  in  membership  is 116 

Total  number  of  members,  Ai)rii  1, 1891 1560 


70  HOW  TO  COOPERATE. 

[Second  page.] 

Your  Directors  have  pleasure  in  stating  that  our  mem- 
bership, capital  stock,  and  trade  continue  to  steadily 
increase.  During  the  year  our  sales  have  increased 
$38,793.05,  and  net  profits  $3,906.90.  You  will  note 
that  the  checks  returned  for  dividend  amount  to 
$7,759.00,  more  than  our  sales,  and  although  our  divi- 
dend is  smaller  than  last  quarter,  still  our  net  profits 
show  a  greater  percentage  on  sales. 

In  accordance  with  your  vote,  arrangements  have 
been  made  for  enlarging  the  Lawrence  street  store. 

Kespectfully  submitted  on  behalf  of  the  directors, 
JAMES  SPEED,  President. 


Announcements. 

How  TO  Become  a  Member.— This  association  is  open  to  member- 
ship from  the  general  public  on  nomination  by  a  member,  and  accept- 
ance by  the  board  of  directors.  Blank  forms  of  application  may  be 
obtained  at  the  stores. 

Immediately  after  a  candidate  for  membership  is  admitted,  a  share 
book  will  be  given  him,  into  which  all  subscriptions  will  be  entered. 
Upon  payment  of  one  dollar  on  account  of  shares,  the  subscriber  is 
entitled  to  have  full  dividends  on  checks  returned.  Tliis  dividend  can- 
not be  withdrawn  until  full  amount  of  one  share  stands  to  the  credit 
of  the  subscriber  by  payment  or  otherwise. 

The  clerk's  oflftce  is  open  every  Friday  evening  from  7  to  9  o'clock  to 
receive  and  pay  out  subscriptions. 

We  wish  to  call  the  attention  of  the  stockholders  to 
the  fact  that  we  are  in  a  position  to  deliver  from  our 
own  yard,  Hardwood,  Birch,  Pine,  and  Pine  Slabs,  in 
stick  or  prepared. 

Note. — Your  loads  are  sent  out  in  larger  wagons  than 
the  average  peddler  uses. 

Arrangements  are  still  in  force  with  LORD  BROS.,  503  Essex  street, 
and  ROBERT  BARKER.  517  Broadway,  to  supply  our  members  with 
boots  and  shoes ;  W.  H.  GILE  &  CO.,  224  Essex  street,  for  the  supjily  of 
clothing;  R.  M.  CROSS  &  CO.,  247  Essex  street,  for  the  supply  of  dry 
goods.  Similar  arrangements  have  been  made  with  WM.  FORBES  & 
SONS,  for  the  supply  of  stoves,  etc.  Upon  presenting  at  store  receipted 
bin  from  them,  checks  will  be  given  in  exchange,  the  same  as  for  pur- 
chases made  at  our  store. 


THE   COOPERATIVE   STORE.  71 

Dividends  and  Interest  on  this  quarterns  business  only, 
will  be  paid  at  Central  store,  on  Friday,  May  \,  from  2 
to  8  p.  m.  ;  on  Saturday,  May  "Z,  at  Branch  store.  No.  2 
Hancock  street,  from  12  to  2.30  p.  m.  j  and  at  Branch 
store,  No.  1,  Lawrence  street,  from  3  to  S  p.  m.  All 
dividends  and  interest  not  withdrawn  on  these  days 
will  be  transferred  to  member's  account,  and  cannot  be 
withdrawn  without  notice. 

Members  are  earnestly  requested  to  allow  their  dividends  to  remain 
to  their  credit.  This  is  one  of  the  best  and  surest  ways  for  working- 
men  to  accumulate  savings. 

Customers  are  hereby  notified  that  not  more  than 
twenty  dollars  in  checks  will  be  exchanged  on  any  one 
day.  The  storemen  have  strict  instructions  to  enforce 
this  regulation. 

Colored  checks  for  dividends  will  be  received  as  follows : 
Central  store,  Broadway,  June  26,  from  2  to  8  p.  m.  ; 
Branch  No.  2,  Hancock  street,  June  ^Tl,  from  12  to  2.30 
p.  m. ;  Branch  No.  1,  Lawrence  street,  June  27,  from 
3  to  8  p.  m. 

Members  will  please  note  that  it  is  desirable  that  all  share  books 
should  be  returned  every  quarter  so  that  tliey  may  be  entered  up  and 
audited. 


Business  for  Quakteuly  Meeting. 

Records  of  last  quarterly  meeting. 

Acting  upon  report  and  balance  sheet. 

Election  of  directors,  treasurer,  clerk,  and  auditor. 

New  business. 


72 


HOW  TO   COOPERATE. 


[Third  page.] 


Clerk's  Statement    for  Quarter  Ending  March 
31,  1891. 


RECEIPTS. 

Casli  uii  hand  Jan.  1 $  3,025  47 

Sales 52,267  57 

Share.s  and  instalments  . .  6,964  30 

Inttiatiun  fees 65  00 

Rents 87  75 

Manure 27  50 


$61,437  59 


DISBURSEMENTS. 

Int.  and  divid'nd  paid  out  §1,500  06 

Shares  and  instal.  "    off  3,843  97 

Insurance 112  50 

Exi)ense 743  14 

Fixtures 250  00 

Stable 395  00 

Salaries,  niereh'disedept.  2,114  76 

"         dry  goods       "  230  66 

"          fuel                    "  734  13 

Purchases  of  goods 43,274  49 

Freight 198  52 

Real  estate 1,000  00 

Non-members'  dividend..  56  45 

Casli  on  liand 6.983  91 

$61,437  59 


Profit  and  Loss. 


Proportion  taxes  and  ins.  $163  89 

Int.  educa'l  fund. $    1  63  )  koi  n^ 

"    capital 520  31)  5^194 

Depreciation  of  fixtures..  384  50 

Salaries,  merchandise 2,114  76 

fuel 734  13 

"          dry  goods 230  66 

Freight 198  52 

Horse  Iceeping 397  50 

SUNDRY    EXPENSES. 

Horseshoeing $  48  06 

Eepair'gharn's,  etc.    40  75 

"         wagons, etc.  63  45 

Prinfg,  station 'y,  "  125  87 

Telep'ne  &  teleg'ms   33  55 

Cash  carrier 18  00 

Traveling  expenses. 117  00 

Ice 23  36 

Rent 107  00 

Gas  &  electric  liglits  90  69 

Water 17  47 

Repairing  baskets  . .  15  75 

Coal 35  55 

Salaries 42  19       778  69 

Members'  di  vidend 4,089  83 

Non-members'  dividend..         56  45 
Sinking  fund 470  86 

$10,141  73 


Gross  profits $10,141  73 


$10,141  73 


THE   COOPERATIVE   STORE. 


73 


Ledger  Balances. 


Merchandise  on  hand $13,479  21 

Fuel                        "         3,151  85 

Dry  goods             "         7,923  57 

Fixtures 7,154  21 

( Holly  street  10,612  00 

Real  Estate  \  Railroad 4,111  81 

(  Hancock  St..  4,473  72 

Taxes  and  insurance 327  80 

Cash  on  hand 6,983  91 

$58,218  08 


SinkinR  fund $7,537  9T 

Stockholders'  claims 45,937  78 

Educational  fund 132  11) 

Int.  quarter  end'g  Mar.  31       520  31 
Stockholders'  dividend...    4,089  83 


$58,218  08 


Kespectfully  submitted, 

George  Dewhirst,  Clerk. 
Examined  and  found  correct. 

George  Hartley,  Auditor. 

[Fourth  page.] 

Twenty-sixth  Quarterly  Statement. 
ARLINGTON     COOPERATIVE     ASSOCIATION. 


DIRECTORS'     ATTENDANCE. 

Whole  number  of  meetings  during  tlie  year,  34. 


JAMES  SPEED,  President 

31 

GEO.  DEWHIRST,  Clerk     .... 

34 

FRANK  FARR,  Treasurer 

0 

J.  g.  INGALLS        ..... 

30 

JOHN  WILKINSON        .... 

29 

GEO.  LIGHTFOOT                 .... 

18 

RICHARD  CAMPBELL 

30 

J.  H.  HULFORD      ..... 

18 

GEO.  ELLIS        ..... 

27 

W.  J.  BUTLER         ..... 

29 

JAMES  LAWLOR            .... 

29 

JOHN  WATTS           ..... 

32 

J.  B.  LYALL       ..... 

31 

Whole  number  meetings  advisory  commit 

tee,  57. 

J.  G.  INGALLS         ..... 

50 

GEO.  ELLIS        ..... 

65 

JOHN  WATTS           ..... 

51 

Comment  on  the  Statement. — The  first  and  most 
important  point  is  that  the  entire  business  is  for  cash. 
The  cooperators  thus  avoid  all  bad  debts ;  they  also 
avoid  the  tax  on  those  who  pay  to  make  up  for  losses  on 


74  HOW   TO    COOPERATE. 

dead  beats,  which  is  borne  by  all  prompt  paying  custom- 
ers of  private  stores.  Tlie  ledger  balances  do  not  in- 
clude any  such  thing  as  bills  receivable,  neither  are  there 
any  bills  payable.  The  only  exception  to  this  is  when 
a  heavy  purchase,  as  of  coal,  is  made,  part  of  which  has 
to  be  carried  as  bills  payable  for  a  time,  but  this  is  done 
only  when  great  savings  can  be  made,  and  is  not  the 
rule. 

The  next  point  to  be  noted  is  that  the  members'  checks 
returned  were  over  seven  thousand  dollars  in  excess  of 
the  sales.  This  was  because  the  association  does  not 
require  that  checks  shall  be  returned  at  the  end  of  the 
quarter.  Some  members  bring  in  their  checks  only 
twice  a  year.  The  Johnson  county  cooperative  associa- 
tion requires  all  checks  on  a  quarter's  business  to  be 
returned  within  a  few  days  of  the  end  of  the  quarter,  or 
the  dividend  is  forfeited.  Mr.  Dewhirst  says  that  theo- 
retically this  is  a  good  rule,  but  practically  the  objection 
is  that  it  adds  extra  red  tape  which,  so  far  as  members 
are  concerned,  should  be  done  away  with  as  much  as 
possible. 

It  is  also  to  be  noted  that  the  interest  on  capital  stock 
is  properly  counted  as  an  expense,  like  salaries  and  other 
expenses.  The  large  net  gain  in  membership  is  notice- 
able. The  confidence  the  members  have  in  the  store  is 
shown  by  the  fact  that  the  average  investment  of  each 
member  is  fully  thirty  dollars, — a  large  sum  considering 
that  most  of  the  members  are  mill  operatives,  earning 
from  five  to  nine  dollars  a  week.  The  increase  in  the 
business  reported  is  remarkable.  The  announcements 
on  the  second  page  of  the  statement  are  important  to  the 
members. 

The  crowning  feature  of  the  report  is  the  very  clear 
clerk's  statement  on  the  third  page.  No  business  house 
can  show  a  cleaner  balance  sheet,  especially  when  we 
remember  that  the  fixture  account  is  reduced  from  over 


THE  COOPERATIVE   STOKE.  75 

eleven  thousand  dollars,  that  the  inventory  is  taken  at 
cost  or  less,  and  that  the  real  estate  is  worth  probably 
twenty  per  cent  more  than  it  is  put  in  at.  The  clear- 
ness with  which  the  statement  shows  where  the  money 
came  from,  and  where  it  went  to,  will  also  satisfy  the 
most  exacting. 

Trading  W^ith  Other  Stores. — In  explanation  of 
the  sales  of  boots  and  shoes,  clothing,  stoves  and  tin 
ware,  also  dry  goods  from  R.  M.  Cross  &  Co.,  noted  in 
the  clerk's  report,  it  should  be  stated  that  these  are  arti- 
cles not  dealt  in  by  the  Arlington.  For  the  accommo- 
dation of  its  members,  however,  it  has  an  arrangement 
with  the  four  firms  mentioned,  by  which  a  dividend  of 
ten  per  cent  on  all  purchases  at  such  stores  is  paid  by 
these  stores  direct  to  the  association  on  such  receipted 
bills  from  them  as  may  be  presented  to  it  by  its  members. 
The  purchaser  receives  the  same  dividend  at  the  end  of 
the  quarter  on  such  purchase  as  though  it  were  obtained 
directly  from  the  association  itself.  This  is  a  feature 
which  has  also  been  long  tried  in  England  and  with 
marked  success.  It  is  not  only  a  convenience  to  the 
members,  securing  them  the  same  rebate  or  dividend  as 
on  goods  bought  at  the  cooperative  store,  but  it  yields  a 
small  income  to  tlie  store  and  also  makes  these  dealers 
in  other  lines  its  special  friends  instead  of  unnecessarily 
antagonizing  them,  as  is  so  frequently  done  by  coopera- 
tive societies.  It  will  be  observed  that  the  receipted 
bills  from  these  four  outside  stores  tunied  into  the  asso- 
ciation by  the  cooperators  during  the  twenty-sixth  quar- 
ter made  a  total  of  $9,269,  ten  per  cent  of  which  is 
$926.90,  but  the  store  paid  only  a  seven  per  cent  divi- 
dend, so  that  the  store  had  to  pay  out  only  $648.83, 
leaving  the  balance  of  three  per  cent,  or  $278.07  as  addi- 
tional profits.  The  cooperators  pay  the  regular  prices 
at  these  stores  and  their  receipts  are  their  vouchers. 
This  plan  therefore  does  away  wholly  with  the  cumber- 


76  HOW   TO   COOPEKATE. 

some  and  unsatisfactory  system  of  trade  cards,  and  the 
necessity  for  identifying  cooperators  at  other  stores. 
The  Arlington  store  men  know  most  of  their  members, 
so  a  trade  card  is  not  required. 

The  Quarterly  Meeting, — The  clerk's  statement 
carries  with  it  the  notification  of  the  date  of  the  quar- 
terly meeting  of  the  members  and  the  business  that  will 
come  before  them.  They  can  therefore  see  just  what  is 
on  and  can  be  considering  it.  The  meeting  is  called  to 
order  by  the  president.  The  records  of  the  last  quarterly 
meeting  are  read  and  approved.  The  financial  state- 
ment and  report  is  then  read  by  the  clerk.  Questions 
about  it  are  invited  and  often  a  little  profitable  discus- 
sion takes  place,  the  items  being  explained  as  requested. 
This  is  always  done  very  cheerfully,  much  information 
being  imparted  to  the  stockholders  in  this  way  that  it 
would  be  unwise  to  print  in  the  report.  After  the  bal- 
ance sheet  has  been  accepted,  other  business  that  belongs 
to  the  shareholders  may  come  up  and  be  talked  of,  such 
as  extension  of  the  premises  or  increase  of  capital  stock, 
while  any  shareholder  is  at  liberty  to  bring  up  other 
matters  of  interest.  The  by-laws,  however,  do  not  per- 
mit shareholders  to  make  complaints  at  the  meetings, 
such  matters  coming  before  the  advisory  committee  or 
board  of  directors.  Nor  do  the  rules  permit  subjects 
foreign  to  the  affairs  of  the  association  to  be  discussed. 

The  weakest  point  in  the  Arlington  is  that  its  mem- 
bers have  such  confidence  in  the  management  that  they 
do  not  turn  out  to  the  quarterly  meetings,  100  out  of 
1,600  members  being  an  exceptional  attendance.  This 
could  be  overcome  by  preparing  an  attractive  program 
of  talks  and  discussions  to  follow  the  adjournment  of 
the  business  meeting.  In  this  way  the  quarterly  meet- 
ings could  be  made  of  great  educational  value. 

How  the  Arlington  Has  Grown. — The  following 
table  shows  the  develoj)mcnt  of   the  association   in  its 


THE   COOPERATIVE   STORE. 


77 


first  six  years,  ended  Oct.  1,  1890,  proving  conclusively 
that,  rightly  managed,  the  cooperative  store  is  a  grand 
success : 


Number  of  shareholders 

Capital  stock 

Sales 

Interest  paid 

Net  profits 

Total  return  on  capital. 

Ditto  per  cent 

Sinking  fund 

Dividend  paid 


1885.  1886.  1887.  I  1888.  I  1889.  |  1890. 


280  351 
83,557  S6,027 
38,195  45,385 

1731  192 
2,273 


2,446 

76 

477 

1,950 


3,770 
3.962 
103 
1,200 
3,118 


1 Grand 

I  Tot  (I  I 

577|         751       l,om,     1,391       1,381 
$14,744  $20,203  §27,586  $40,312  $40,312 
70,970   105,645  141,007  184,753  585,956 


442 
6,969 
6,411 
73 
2,150 
5,145 


877 
7,477 
8,355 
47 
3,061 
6,781 


1,144 
10,378 
11,523 
50 
4,408 
9,236 


1,558 

14,039 

15,597 

51 

6,518 
12,132 


4,387 

43,907 

48,294 

55 

6,518 
38,632 


The  dividends  on  purchases  have  varied  from  seven  to 
nine  per  cent.  It  will  be  noted  from  the  table  that  had 
the  amount  thus  returned  to  the  patrons  of  the  store 
been  divided  only  on  the  average  interest-bearing  capi- 
tal, the  average  interest  on  the  capital  stock  for  the  six 
years  would  have  been  fifty-five  per  cent  annually.  The 
Arlington  association  is  more  than  maintaining  its  pre- 
vious rapid  progress,  for  April  1,  1891,  the  stockholders 
had  increased  to  1,560  ;  capital  stock,  $45,938;  sinking 
fund,  17,538 ;  total  amount  of  sales  to  date  $690,534 ; 
total  amount  of  dividends  divided,  $45,888.  The  sales 
for  the  year  ending  Oct.  1, 1891,  will  be  nearly  a  quarter 
of  a  million  of  dollars. 

The  small  expenses  further  confirm  good  management. 
Aside  from  interest  on  capital  and  depreciation  of  fix- 
tures, the  expense  in  the  twenty-sixth  quarter  was  only 
a  fraction  over  eight  per  cent  on  the  business  done. 
Since  most  of  the  goods  have  to  be  delivered  at  the 
members'  houses,  this  shows  exceedingly  close  manage- 
ment. Still  the  help  are  well  paid,  boys  receiving  from 
four  to  ten  dollars  a  week,  and  men  from  nine  to  eight- 
een dollars  a  week.  The  grocery  stores  open  every 
morning  at  6.30,  the  dry-goods  stores  at  8,  closing  on 
Monday  and  Tuesday  at  7,  Wednesday  at  1,  Thursday 
at  8,  Friday  at  9.30  and  Saturday  at  10  o'clock.  The 
stores  are  thus  closed  one-half  day  in  each  week,  giving 


78  HOW  TO   COOPERATE. 

employes  a  weekly  lioliday  the  year  tlirough — something 
almost  im heard  of  in  private  corporations. 

The  men  who  have  made  this  conspicuous  success 
have  done  it  more  by  strict  attention  to  business  than 
by  any  exceptional  talent.  The  directors  just  now 
include  Americans,  Englishmen,  Irishmen  and  Scotch- 
men. These  gentlemen  are  for  the  most  part  overseers 
or  assistant  overseers  in  the  mills  and  serve  without 
pay.  They  all  cheerfully  admit,  however,  that  the 
society  cannot  be  run  by  its  directors.  Yet  the 
clerk,  George  Dewhirst,  seems  to  have  grown  up  with 
the  business.  He  was  born  in  Yorkshire  in  1849,  emi- 
grating to  America  in  1881.  In  England  he  was  a  book- 
keeper and  cashier  for  a  large  firm  of  lumber  dealers, 
and  is  one  of  a  family  of  cooperators  who  were  members 
of  the  Keighly  society.  He  went  into  the  Arlington 
mills  as  a  weaver  and  worked  his  way  until  he  got  into 
the  general  office  as  bookkeeper.  He  kept  the  accounts 
of  the  cooperative  store  the  first  three  years  evenings,  in 
connection  with  the  treasurer,  and  was  then  chosen 
clerk  and  manager,  which  position  he  has  since  held. 
It  will  be  noticed  that  he  had  had  clerical  experience 
and  was  a  good  bookkeeper — important  points  in  a  store 
manager. 

An  Instructive  Failure. — It  is  true  that  many 
cooperative  stores  have  started  under  what  appeared  to 
be  brilliant  auspices,  only  to  fail  disastrously.  But  in 
every  case  investigation  shows  such  failures  to  be  readily 
accounted  for,  mismanagement  and  departure  from  the 
principles  of  cooperation  being  the  true  causes.  Aside 
from  the  many  attempts  of  temporary  duration,  per- 
haps the  most  instructive  failure  is  that  of  the  Philadel- 
phia Industrial  Cooperative  Society,  Limited,  which  was 
incorporated  in  1874,  and  at  one  time  reached  a  member- 
ship of  over  2,500,  operating  eight  stores,  and  being 
considered  the  most  prosperous  cooperative  association 


THE   COOPERATIVE   STOEE. 


79 


in  America.  It  stopped  business  in  February,  1890, 
when  a  proper  taking  of  stock  disclosed  a  deficiency  of 
over  $10,000,  after  wiping  out  its  reserve  fund  of  about 
$6,000.  The  rapid  growth  of  the  Philadelphia  associa- 
tion and  its  equally  rapid  falling  away  are  shown  by  the 
following  comparison,  the  fifteenth  year  being  1889  : 


Profits,  in- 

Sales. 

cluding  int.  on 
capital. 

Sinking  fund. 

Capital  stock. 

6th  yoar.  .«ini.217 

$    5,584 

$    461.79 
1,067.08 

7th 

"        132,068 

9,851 

8th 

"        209,092 

15,543 

2,992.67 

$40,881.47 

9th 

241,291 

22,745 

2,845.81 

59,131.05 

10th 

"        236,688 

21,043 

3,565.25 

63,000.88 

11th 

"        202,043 

13,688 

4.061.85 

55,188.75 

12th 

171,278 

11.162 

4,523.70 

49,349.36 

13th 

"        126,080 

6,960 

4,999.92 

44,233.55 

14th 

122,590 

4,102 

5.565.50 

46,105.70 

15th 

53,262 

*10,933 

5,972.68 

28,700.29 

•Net  loss. 

Investigation  proved  it  a  wonder  that  the  association 
had  run  as  long  as  it  did.  In  the  first  place,  the  store 
never  had  a  competent  executive  or  manager.  The  di- 
rectors attempted  to  run  the  business,  and  did  it  in  an 
unbusinesslike  manner,  because,  like  many  working 
men,  they  were  not  familiar  with  such  matters.  In  fact, 
there  were  so  many  cranks  and  impracticable  men  among 
the  shareholders  that  the  directorship  was  an  unbearable 
office,  and  good  men  could  not  be  secured  for  this  place. 
An  attempt  was  made  to  get  a  more  competent  general 
manager,  but  the  directors  did  not  work  in  harmony 
with  him  and  did  not  feel  justified  in  paying  the  salary  a 
really  competent  man  could  command.  Again,  the 
directors  opened  branch  stores  and  tried  to  do  much 
trade  without  having  the  necessary  capital,  carrying 
heavy  mortgages  to  do  this  and  therefore  having  large 
expenses  for  borrowed  money.  They  failed  to  solidify 
the  business,  constantly  deceived  themselves  in  their 
inventory  and  did  not  allow  enough  for  depreciation  of 
fixtures.  During  the  ninth  year  they  reduced  the  sink- 
ing fund  to  keep  up  the  rate  of  dividend.     This  gave  a 


80  HOW   TO   COOPERATE. 

shock  to  the  confidence  of  the  shareholders  that  was 
never  recovered,  for  the  business  and  membership  con- 
stantly fell  off.  There  was  a  great  scramble  to  get  out 
during  the  sixty-first  quarter,  ended  Nov.  16,  1889,  dur- 
ing which  capital  stock  and  loans  to  the  amount  of  over 
$21,000  were  withdrawn.  When  the  unsound  state  of 
the  association  was  discovered,  early  in  the  '80's,  the 
whole  thing  was  not  gone  over  thoroughly  and  put  down 
to  hard-pan.  Had  this  been  done,  under  proper  man- 
agement this  association  might  to-day  have  been  doing  a 
business  of  half  a  million  dollars  a  year.  The  great 
lesson  of  its  failure  is  not  the  weakness  of  cooperation, 
but  its  strength,  for  only  a  cooperative  corporation  could 
stand  such  mismanagement  as  long  as  this  one  did.  The 
contrast  between  the  Philadelphia  and  the  Arlington  is 
most  instructive. 

Summarizing  it  All,  we  cannot  do  better  than  quote 
in  full  from  "Workingmen  Cooperators,"  Acland  and 
Jones's  pithy  condensation,  every  word  of  which  is  as 
true  in  America  as  in  England  : 

"  Essential  Points. — (a)  The  store  is  open  to  all ; 
{b)  charges  ordinary  market  prices ;  (c)  receives  cash 
only,  and  gives  no  credit ;  (d)  gives  dividend  in  propor- 
tion to  purchases ;  (e)  every  member  must  have  a  share 
or  shares,  and  receives  good  interest  on  them ;  (/)  all 
are  equal  in  voting  power,  each  having  one  vote  only 
whether  they  hold  few  or  many  shares;  (g)  the  store 
sells  genuine  articles,  which  are  what  they  profess  to  be ; 
(h)  the  store  has  an  honest  manager  and  active  directors ; 
(i)  the  society  insists  on  an  efficient  and  an  intelligent 
audit  and  stock-taking. 

*'  Causes  of  Success. — (1)  A  clear  understanding 
and  performance  of  the  duties  of  an  officer,  an  employe, 
and  a  member ;  (2)  competent  and  painstaking  officers  • 
(3)  competent  and  trustworthy  employes ;  (4)  proper 
security  for  the  honesty  and  efficiency  of  the  principal 


THE   COOPERATIVE   STORE.  81 

employes ;  (5)  amicable  and  earnest  working  together ; 
(6)  promptitude  and  punctuality  in  business;  (7)  impar- 
tiality, civility  and  pleasant  manners  in  the  members 
and  in  the  staff ;  (8)  generous  treatment  of  the  em- 
ployes ;  (9)  judicious  purchasing  and  careful  regulation 
of  the  stocks  ;  (10)  cash  purchases  and  cash  sales;  (11) 
carefully  regulated  expenses ;  (12)  judicious  investment 
of  all  surplus  capital ;  (13)  ample  depreciation  of  prop- 
erty ;  (14)  ample  reserve  funds ;  (15)  good  bookkeeping 
and  auditing  ;  (16)  officers  giving  full  and  free  explana- 
tions to  the  members'  meetings ;  (17)  members  having 
full  confidence  in  the  officers. 

"Causes  of  Failure. — (l)Allowing  the  storekeeper 
to  do  as  he  likes  ;  (2)  allowing  credit  to  purchasers ;  (3) 
bad  bookkeeping  and  auditing ;  (4)  bad  by-laws ;  (5) 
carrying  repairs  and  renewals  to  fixture  and  real  estate 
account  instead  of  to  expenses  account;  (6)  competing 
with  the  stores  that  cut  prices ;  (7)  expenses  too  great 
for  the  business ;  (8)  employment  of  incompetent  per- 
sons; (9)  dishonesty  ;  (10)  injudicious  purchasing ;  (11) 
injudicious  and  frequent  changes  of  policy ;  (12)  mem- 
bers purchasing  away  from  the  store;  (13)  not  taking 
ample  security  from  persons  in  a  position  to  misapply 
the  society's  effects ;  (14)  inefficient  officers ;  (15)  mem- 
bers being  unreasonable  and  quarrelsome;  (16)  purchas- 
ing goods  on  credit;  (17)  overbuilding;  (18)  starting 
branches  or  new  departments  before  the  society  is  strong 
enough  to  bear  the  burden  ;  (19)  waste  behind  the  coun- 
ter from  bad  stock  keeping  or  careless  weighing."  To 
which  we  may  add  that  another  and  a  great  cause  of 
troubles  that  lead  to  failure  is  the  heretofore  too  com- 
mon idea  that  cooperation  was  a  new  way  of  transacting 
business,  whereas  its  division  of  net  earnings  is  the  only 
thing  actually  new  about  it,  as  explained  on  Page  16. 

In  Conclusion,  it  would  be  difficult  to  add  to  the 
foregoing  exhaustive  account  of  the  cooperative  store, 
6 


82  HOW  TO   COOPERATE. 

and  to  the  further  experiences  narrated  in  the  next  chap- 
ter and  also  in  the  Appendix,  a  more  fitting  conclusion 
and  worthy  advice  than  that  given  below.  It  emanates 
from  and  is  based  on  the  long  and  successful  experience 
of  the  old  Rochdale  Pioneers,  being  as  true  in  America 
as  on  the  other  side  of  the  water. 

1.  Procure  the  authority  and'  protection  of  the  law 
by  incorporation. 

2.  Let  integrity,  intelligence  and  ability  be  indis- 
pensable qualifications  in  the  choice  of  oJBScers  and  man- 
agers, and  not  wealth  or  distinction. 

3.  Let  each  member  have  only  one  vote,  and  make 
no  distinction  as  regards  the  amount  of  wealth  any  mem- 
ber may  contribute. 

4.  Let  majorities  rule  in  all  matters  of  government. 

5.  Look  well  after  the  money  matters.  Punish  fraud 
when  duly  established  by  the  immediate  expulsion  of 
the  defrauder. 

6.  Buy  your  goods  as  much  as  possible  in  the  first 
markets ;  or,  if  you  have  the  produce  of  your  industry 
to  sell,  contrive,  if  possible,  to  sell  it  in  the  last. 

7.  Never  depart  from  the  principle  of  buying  and 
selling  for  spot  cash. 

8.  Beware  of  long  reckonings.  Quarterly  accounts 
are  the  best,  and  should  be  adopted  when  practicable. 

9.  For  the  sake  of  security,  always  have  the  inven- 
toried value  of  the  fixture  account  at  least  one-fourth 
less  than  its  marketable  value. 

10.  Let  members  take  care  that  the  accounts  are 
properly  audited  by  men  of  their  own  choosing. 

11.  Let  committees  of  management  always  have  the 
authority  of  the  members  before  taking  any  important 
or  expensive  step. 

13.  Do  not  court  opposition  or  publicity,  nor  fear  it 
when  it  comes. 

13.  Choose  those  only  for  your  leaders  whom  you 
can  trust,  and  then  give  them  your  confidence. 


CHAPTER  IV. 

FUETHEE     EXAMPLES    OF    COOPERATIVE     DISTEIBUTIOX. 
HOW  TO    STAET  A  STOEE. 

The  Lessons  of  Experience  are  so  valuable,  and 
the  cooperative  store  the  form  of  cooperation  that  will 
be  most  practiced,  we  give  here  a  full  statement  of  several 
other  successful  enterprises  of  this  kind.  The  Appendix 
also  contains  brief  accounts  of  many  other  cooperative 
stores.  These  examples  are  sufficiently  varied  as  to  loca- 
tion, occupation  of  members,  kind  of  management,  etc., 
to  more  than  confirm  the  claims  previously  made  for 
cooperation  as  adapted  to  all  sections,  all  vocations  and 
all  peoples.  Accompanying  each  statement  are  sugges- 
tions from  the  experience  of  the  managers,  coupled  with 
author's  comment  at  times.  Thus  would-be  cooperators 
may  get  the  full  benefit  of  all  this  practical  experience. 
We  by  no  means  decry  the  importance  of  the  theory  of 
cooperation,  but  believe  the  necessity  for  its  successful 
practice  more  than  justifies  this  chapter.  It  concludes 
with  a  brief  summary  of  just  how  to  start  a  cooperative 
store. 

THE  LYONS  COOPEBATIVE  ASSOCIATION. 

The  History  of  this  very  successful  association  is 
full  of  promise  for  cooperative  effort  among  wage-work- 
ers in  cities  and  villages  as  well  as  among  farmers. 
Lyons  is  a  brisk  manufacturing  and  business  center,  the 
shire  town  of  Clinton  County,  Iowa,  on  the  Mississippi 
river,  opposite  Fulton,  111.,  about  one  hundred  and 
thirty-six  miles  from  Chicago,  with  a  population  of  five 

83 


84  HOW  TO  COOPERATE. 

thousand  seven  hundred  and  ninety.  When  the  local 
assembly  of  the  Knights  of  Labor  was  organized  at 
Lyons,  July  12,  1885,  among  its  principles  was  one 
which  taught  cooperation.  This  subject  was  discussed 
repeatedly  until  at  a  meeting  held  Dec.  17,  1886,  one  of 
the  members  laid  fifty  cents  upon  the  table  to  start  a 
fund  to  begin  cooperation  in  some  form.  He  was  fol- 
lowed by  ten  others,  the  total  subscribed  being  six  dol- 
lars and  fifty  seven  cents. 

A  cooperative  committee  of  three  to  solicit  members 
and  capital  was  appointed,  which  elected  one  of  its  num- 
ber president,  another  secretary,  and  a  third  treasurer, 
and  decided  to  put  the  money  in  the  bank  in  the  name 
of  all  three  of  the  committee  so  that  one  could  not  draw 
it  out  without  the  consent  of  the  others.  The  commit- 
tee and  those  who  had  paid  continued  to  solicit,  and 
reported  progress  to  the  weekly  meetings.  Soon  they 
had  upward  of  four  hundred  dollars  paid  in,  cash  being 
culled  for  instead  of  subscriptions  to  stock  or  promises 
that  might  never  be  realized  upon. 

A  long  discussion  as  to  whether  the  funds  should  be 
used  in  manufacturing  or  retail  business  followed,  the 
latter  being  finally  adopted  as  the  simplest  to  control. 
The  argument  against  manufacturing  was  that  the  work- 
ers had  no  market  for  their  goods  and  that  it  would  be 
far  better  to  establish  retail  stores  and  create  a  demand 
for  the  goods  and  manufactures  would  follow. 

How  it  Started. — A  general  meeting  of  the  contrib- 
utors to  the  fund  was  called,  to  which  was  submitted 
the  articles  of  incorporation  carefully  prepared  in  ac- 
cordance with  the  State  law.  These  were  adopted  and 
the  president,  secretary,  treasurer  and  directors  elected, 
who  were  to  be  the  incorporators.  This  body  moved 
ahead  at  once,  filing  the  articles  of  incorporation  before 
a  notary  public  July  7,  1887,  before  the  county  recorder 
July  8,  and  before  the  Secretary  of  State  July  15,  and 


OTHER   SUCCESSFUL   STORES. 


85 


86  HOW  TO   COOPERATE. 

got  their  charter  from  the  latter  official  July  21.  (See 
Appendix.) 

By-laws  were  adopted,  and  a  store  room  rented  in  a 
good  location  on  Main  street  for  thirty  dollars  a  month, 
which  was  stocked  with  six  hundred  dollars  worth  of 
groceries  bought  of  a  wholesale  dealer  for  spot  cash. 
The  store  opened  for  business  Aug.  12,  less  than  one 
year  from  the  first  effort.  In  the  meantime,  the  ques- 
tion arose  whether  to  have  an  experienced  man  at  a  big 
salary  to  run  the  store  or  an  inexperienced  man  at  a 
small  salary  and  let  him  learn  and  grow  with  the  busi- 
ness. The  members  wisely  decided  on  the  latter  course, 
selecting  Thomas  H.  Angell  as  manager,  who  is  with 
them  yet,  and  to  whom  we  are  indebted  for  much  of 
our  information.  Mr.  Angell  does  not  recommend  such 
a  selection  as  safe  policy  in  all  cases. 

Outside  the  members  of  the  association  the  public  in 
general,  with  a  few  exceptions,  had  but  little  faith  in 
the  success  of  the  enterprise,  the  expression  being  often 
heard  that  "the  boys  were  having  a  little  fun,  but  it 
would  not  last  long."  More  or  less  opposition  was  pro- 
voked, and  the  officers  received  a  letter  threatening  to 
blow  up  the  store  with  dynamite.  Late  in  the  fall  when 
the  store  was  quite  well  established  the  cooperators  prac- 
ticed a  shrewd  advertising  dodge  by  entering  into  a 
newspaper  voting  contest  for  the  most  popular  grocery, 
coming  in  second-best  against  the  combined  stores  of 
the  town.  Then  the  other  dealers  said  the  "Coops'' 
could  not  last  all  winter,  and,  when  the  store  bought  a 
whole  car-load  of  potatoes  in  the  spring,  that  it  was 
surely  gone. 

A  Building  Purchased.— But  on  Feb.  25,  1888,  the 
"Coops"  purchased  what  was  then  known  as  the  Mur- 
phy block  for  $4,025,  having  got  tired  of  paying  $360  a 
year  rent.  That  sum,  with  what  rents  were  received 
from  the  part  of  the  building  not  used  by  the  store  at 


OTHER  SUCCESSFUL   STOKES.  87 

that  time,  more  than  paid  the  interest  on  the  purchase 
money,  taxes  and  insurance,  and  left  a  small  balance 
each  year  to  apply  on  the  principal.  The  society  now 
owns  it  and  has  christened  it  "Cooperative  Block." 
After  this  gradual  but  substantial  growth,  the  store 
began  to  win  the  confidence  of  business  men  and  the 
public  in  general  and  the  result  was  an  increase  of  mem- 
bers and  capital,  and  its  adjunct — patronage,  until  at 
the  fourteenth  quarterly  meeting,  Jan.  20,  1891,  it  was 
found  necessary  to  increase  the  capital  stock  from 
120,000  to  |]  00,000,  which  was  done,  with  a  limit  in 
the  by-laws  that  no  one  person  should  hold  more  than 
$500  of  stock. 

A  meat  market  was  added  to  the  store  in  the  spring 
of  1890,  which  has  done  very  well.  Thus  encouraged,  a 
clothing  and  boot  and  shoe  department  was  opened  in 
the  fall  of  1890,  which  so  far  has  exceeded  expectations. 
Other  enlargements  and  extensions  are  now  under  con- 
sideration. The  store  now  has  ten  employes,  five  horses, 
three  delivery  wagons  and  an  annual  retail  trade  of 
$60,000  to  175,000  a  year— the  largest  in  the  city. 

Trade  and  Credits. — The  store  charges  the  usual 
retail  prices.  After  paying  expenses  of  management 
and  interest  on  capital,  also  setting  aside  at  the  rate  of 
ten  per  cent  per  annum  to  repair  the  deterioration  of 
fixed  stock,  the  remaining  profits  are  divided  in  divi- 
dends to  members  on  their  paid-up  purchases,  which 
have  averaged  eight  per  cent  during  the  fifteen  quarters 
to  April  20.  Two  per  cent  quarterly  is  paid  on  capital, 
so  that  if  a  member  owns  fifty  dollars  worth  of  stock, 
his  interest  for  three  months  amounts  to  one  dollar; 
and  if  his  paid-up  trade  is  of  the  average  amount — sixty 
dollars  worth — and  the  dividend  on  the  same  only  five 
per  cent,  he  gets  three  dollars  more,  or  four  dollars  in 
all,  which  is  eight  per  cent  quarterly  on  his  fifty  dollars 
capital,  or  thirty-two  per  cent  annually. 


88  HOW  TO  CO6PBBATB. 

Gash  payments  are  insisted  upon,  though  thirty  days' 
credit  is  allowed  if  parties  are  personally  known  to  be 
good.  No  credit  is  given,  even  to  members,  beyond  the 
amount  of  their  capital.  On  this  point  the  store  ought 
to  be  still  more  strict,  for  we  find  the  book  accounts 
(money  owing  by  members)  amounted  to  13,644,  on  Oct. 
20,  1890,  which  sum  had  increased  to  $4,248  three 
months  later.  Mr.  Angell,  however,  says  they  watch 
their  book  accounts  carefully,  and  keep  them  all  good, 
for  when  a  man  does  not  pay  as  he  promises  he  is 
stopped,  even  at  the  risk  of  losing  a  customer.  In  spite 
of  this  precaution,  however,  it  is  to  be  noted  that  dur- 
ing the  fourteenth  quarter  $77.49  was  allowed  for  bad 
debts.  This  sum  is  almost  thirteen  per  cent  of  the  divi- 
dend paid  during  that  quarter.  Had  the  $77.49  been 
paid  in  cash,  the  balance  to  the  credit  of  the  sinking 
fund  would  have  amounted  to  $94.88.  Contrast  this 
loss,  in  three  months,  from  bad  debts  on  sales  of  $15,000, 
with  the  loss  of  only  $2.70  in  a  business  of  $40,000  in 
several  years,  reported  by  the  South  Paris  (Me. )  grange. 
The  Arlington  cooperative  never  lost  a  dollar  from  bad 
bills ;  no  bills  receivable  appear  on  its  ledger,  the  balance 
of  assets  above  real  estate,  fixtures  and  merchandise 
always  being  "cash  on  hand,"  except  as  noted. 

The  Strong  Points  of  the  success  of  the  Lyons 
association  are  pronounced  by  Mr.  Angell  to  be  the 
ownership  of  its  own  store,  so  as  to  avoid  paying  rent, 
judicious  advertising,  close  attention  to  business  and 
conducting  it  honestly  and  economically,  close  buying 
and  discount  of  bills.  All  the  employes  are  members 
and  therefore  look  after  the  business  the  same  as  if  it 
were  their  own  establishment.  Every  item  sold  to 
members  either  for  cash  or  credit  is  entered  on  the  day- 
book and  thence  transferred  to  the  ledger,  which  shows 
every  three  months  the  amount  of  goods  bought  and 
paid  for  in  each  department.     Its  progress  appears  from 


OTHER  SUCCESSFUL  ST0BE8. 


89^ 


the  following  comparison,  but  it  should  be  added  that 
the  year  1887  ended  Aug.  20,  1888,  and  so  on,  while  the 
figures  under  1890  are  only  for  the  nine  months  ended 
May  20,  1891 : 


1887. 


1888. '  1889. 


Capital  stock  . . . 

Net  profits 

No.  of  Members. 

Expenses  

Gross  sales 


$2,007 

355 

80 

1,612 

$14,106 


$4,756    $9,620 

753,        909 

120         152 

1,759      2,364 

$21,32ll$30,3»4 


$20,720 

1,917 

228 

3,541 

$42,657 


*$  9,276 
t  3,934 
*  145 

t  9,276 
t$108,467 


It  is  to  be  noted  that  the  net  profits  are  over  thirty 
per  cent  on  the  average  capital,  while  the  economy  of 
the  management  is  shown  by  the  fact  that  the  expenses 
were  only  eight  and  one-half  per  cent  on  the  sales,  in  a 
small  city  where  goods  have  to  be  delivered  to  consumers. 

The  Quarterly  Statement  of  the  secretary,  Eneas 
Cash,  is  very  plain,  though  not  as  clear  or  as  well  made 
up  as  Arlington's  balance  sheet.  The  report  is  printed 
as  an  eight  page  pamphlet,  including  a  list  of  the  trad- 
ing done  by  cash  purchasers,  and  concludes  with  timely 
remarks  from  the  secretary.  We  print  in  full  the  report 
for  the  fourteenth  quarter  ended  Jan.  20,  1891,  omitting 
only  the  members'  list : 

SECEETARY'S    REPORT 

Of  the  Financial  Transactions  of  the  Lyons  Cooperative 
Association  for  the  Quarter  ending  Jan.  20,  1891. 

Mb.  President  and  Fellow-Laborers. — For  the 
fourteenth  time  I  have  the  honor  to  present  to  you  the 
quarterly  report  of  the  financial  transactions  of  the  As- 
^sociation,  and  as  usual  it  is  with  pleasure  I  have  to 
inform  you  that  it  has  been  fairly  successful,  as  you  will 
learn  by  the  following  summary  of  the  business  d«ne 
by  us : — 

The  Association  had  on  hand  at  the  close  of  the  thir- 
teenth quarter : 


90  HOW  TO   COOPERATE. 


FOBH  OF  QUABTEBLY  STATEMENT. 

Merchandise  In  the  grocery  department $    3,909  49 

Merchandise  in  the  meat  department 100  27 

Merchandise  in  the  clothing  department 4,930  32 

We  bought  during  the  quarter 

Merchandise  for  the  grocery  department $    8,960  90 

Merchandise  for  the  meat  department 2,315  44 

Merchandise  for  tlie  clothing  department 2,195  79 

f    13,472  31 

Total 22,412  21 

We  sold  during  the  quarter 

Merchandise  in  the  grocery  department  amount- 
ing to  S    8,704  51 

Merchandise  in  the  meat  department  amounting  to      2,849  32 
Merchandise  in  the  clothing  department  amount- 
ing to 3,256  78 

Total  sales  for  the  quarter $14,810  61 

We  had  on  hand  on  January  20th  merchandise  in 

grocery  department 4,622  43 

Merchandise  in  meat  department 266  67 

Merchandise  in  clothing  department 4,521  17 

$    24,220  88 

Total  gross  profits  on  merchandise 1,808  67 

We  were  allowed  discounts  on  groceries  amount- 
ing to 60  82 

Discounts  on  clothing 284  30  345  12 

We  received  for  rents  of  buildings 40  55 


Total  gross  profits  of $2,194  34 

We  paid  expenses  of  grocery  department  amount-  $    724  81 

Ing  to. 

We  paid  expenses  of  meat  department 217  98 

"            •'          clothing          "          .  25167 

Allowed  for  bad  debts,  grocery 67  31 

"             "          "        meat     8  88 

"             "          "        clothing 130 

Insurance,  taxes,  etc 42  25 

Paid  Interest  on  purchase  real  estate 200  00 

Amount  placed  to  credit  of  stock  depreciation  fund 

for  repairs  to  fixed  stock,  being  2J  per  cent  of 

gross  profits. 54  85 

Dividend  for  quarter  ending  Jan.  20th,  1891  being  2 

per  cent.  [250.74]  on  capital  and  6  per  cent. 

[357.16]  on  paid  purchases 607  90 

Balance,  placed  to  credit  of  sinking  fund 17  39 

$2,194  34 

The  following  statement  will  show  you  the  assets  and 
liabilities  of  the  association  on  January  20,  1891,  and 
from  it  you-can  learn  all  you  desire  or  that  is  necessary 
to  know  of  the  financial  standing  of  the  association. : 


OTHER   SUCCESSFUL   STORES. 


91 


Balance  Sheet. 


Fixed  stock 

Real  estate    actual  cost 

Cash  held  by  treasurer 10  98 

Casli  held  by  mauager 1,350  52 


Book  accounts,  grocery 3,527  20 

Book  accounts,  clothing 458  59 

Book  accounts,  meat 262  29 

Merchandise,  inventory  grocery 4,622  43 

Merchandise,  Inventory  clothing 4,521  17 

Merchandise,  inventory  meats 266  67 

Bills  payable 

Stock  depreciation  fund. .   

Cash  on  deposit 

Sinking  fund 

Dividend  for  quarter 

Capital  balance 


Assets.     .Liabilities. 


$    1,260  98 
5,675  99 


1,361  60 


4,248  08 


9,410  27 


$21,956  82 


$4,642  91 

23  18 

540  92 

266  38 

607  90 

16,875  53 


$21,966  82 


Total  paid-up  capital $16,875  53 

"     interest-bearing  capital 12,537  21 

"     paid-up  purchases  for  quarter 5,909  21 

"     dividend  at  2  per  cent,  on  interest-bearing  capital  and  6 

per  cent,  on  paid-up  purchases  amounts  to 607  90 

Membership  October  20th,  1890 167 

Members  admitted  during  quarter 27 

184 
Members  withdrawn  during  quarter 4 

Total  membership  January  20th,  1891 180 

You  will  pardon  me,  I  know,  if  I  answer  some  of 
those  who  are  trying  to  injure  us,  by  showing  you  what 
profits  the  association  has  made  since  it  has  started  in 
business  and  what  those  who  have  withdrawn  from  the 
association  have  received  during  the  same  time  : 


Dividends 
Declared. 

Dividends 
Withdr'n. 

$    12  27 
59  50 
120  56 
162  14 

195  76 
134  50 
160  67 
272  00 
276  72 
158  70 

196  92 
276  58 
608  92 
607  90 

•'           «'            "       J  anuary  20, 1888 

"           "            ««       April       20,    "    

65 

•<           "             "        July         20,    "    

3  06 

"           •<            "       October  20,    "    

4  91 

"           "            "        January  20,  1889 

7  36 

"           ••            «<        April        20,    "    

14  00 

"           "             '•        July         20,    "    

73  07 

"           "            "       October  20,    "    

46  48 

"           •'            "        January  20,  1890 

39  68 

•«           "            "        April        20,    "    

58  18 

•'           <<            "        July         20,    "    

38  49 

"           •'            <«       October  20,    "    

69  00 

"           "            "       January  20, 1891 

92  63 

Total 

$3,233  04 

$446  40 

92  HOW  TO   CO6PEKA.TE. 

If  we  consider  our  dividend  in  the  light  that  stock 
companies  or  private  enterprises  do,  namely,  as  profit 
on  the  capital  invested,  we  can  easily  see  that  we  have 
made  a  very  profitable  investment,  for  $607  dividend  on 
$12,539  capital  would  be  equal  to  four  and  eight-tenths 
per  cent  every  three  months,  or  over  nineteen  per  cent 
per  annum  on  the  capital  stock  of  the  association.  Do 
you  want  any  better  investment  ? 

You  can  thus  see  that  over  one-eighth  of  our  net 
profits  has  been  paid  out  to  shareholders  who  perhaps 
lent  a  too  willing  ear  to  persons  whose  interests  lie  in 
creating  a  want  of  confidence  in  this  association.  Seven- 
eighths  of  our  shareholders  have  had  confidence  enough 
in  their  association  to  leave  their  dividend  as  capital. 
In  my  estimation  those  who  determine  to  remain  with 
us  are  the  lucky  ones,  for  in  the  end  they  will  share  in 
the  increase  in  value  of  the  property  of  the  association, 
which,  judging  by  recent  sales  of  property  near  to  us, 
is  now  worth  double  what  we  paid  for  it.  Those  who 
have  left  us  have  lost  their  share  of  any  such  increase. 

There  are  many  objections  made  to  our  methods  of 
doing  business  which  I  would  like  to  answer  and  which 
would  not  be  either  made  or  to  be  answered  if  each  one 
of  the  members  would  study  the  principles  of  coopera- 
tion and,  after  being  thoroughly  satisfied  of  its  merits 
and  benefits,  use  all  their  endeavors  to  push  the  useful- 
ness of  the  association  by  both  their  patronage  and  ad- 
vocacy. Especially  do  our  members  want  to  learn  that 
the  association's  stores  are  theirs  to  the  extent  of  their 
capital  and  their  purchases,  and  that  every  cent  of  profit 
made  by  the  association  is  given  to  each  in  proportion 
to  the  amount  of  their  purchases  (bought  and  paid  for) 
during  the  quarter.  In  other  words,  each  one  gets  his 
goods  at  the  cost  of  buying  and  distributing  them.  If  a 
man  has  one  hundred  dollars  capital  in  the  association 
he  owns  one  one-hundred-and-sixtieth  of  lands,  houses 


OTHEB  SUCCESSFUL   STORES.  ^ 

and  goods  and  of  everything  that  the  association  owns, 
and  for  every  one  hundred  dollars  more  that  he  has  his 
interests  are  increased  by  one  one-hundred-and-sixtieth. 
He  is  a  poor  business  man  who  will  own  a  store  himself, 
hire  clerks,  etc.,  and  give  his  trade  and  the  profits 
thereon  to  one  of  his  competitors.  Looking  over  the 
list  of  shareholders  leads  one  to  the  belief  that  we  have 
just  such  men  among  us.  They  put  their  capital  in 
with  us  ;  we  have  clerks  paid  from  the  profits  made  with 
that  capital,  yet  our  clerks  might  stand  idle  while  others 
live  on  the  profits  of  the  trade  furnished  by  our  share- 
holders to  them. 

.  To  the  vast  majority  of  our  shareholders,  however,  I 
have  to  extend  the  thanks  of  the  management  of  the 
association  for  the  trust,  confidence  and  patronage  given 
by  them,  and  ask  them  to  continue  their  noble  endeav- 
ors. You  will  be  called  on  to-night  to  elect  three  di- 
rectors. Select  the  best  men  or  women  you  can  find. 
Select  them  for  their  fitness  and  ability  to  carry  on  the 
business  successfully.  Let  your  deliberations  tend  to 
the  prosperity  of  the  association,  and  going  hence  resolve 
that  you  will  make  Lyons  cooperative  association  the 
greatest,  strongest,  grandest  and  best  of  the  institutions 
of  this  fair  city.  " 

Further  Insight  into  the  workings  of  the  Lyons 
association,  and  useful  hints  for  all  cooperators,  will  be 
found  in  the  secretary's  remarks  for  the  thirteenth  quar- 
terly report:  **From  the  foregoing  you  will  learn  that 
the  shareholders  of  the  association  buy  only  about  one- 
half  the  goods  that  are  sold  by  the  association  ;  that  we 
made  a  gross  profit  of  fifteen  per  cent  on  all  goods  sold ; 
that  we  sold  goods  as  cheaply  as  our  competitors  did  and 
that  now  by  declaring  an  eight  per  cent  dividend  our 
shareholders  have  bought  their  merchandise  eight  per 
cent  cheaper  than  they  could  have  bought  it  anywhere 
else.     If  every  shareholder  had  done  their  full  duty  by 


94  HOW  TO  COOPERATE. 

the  association  and  for  their  own  best  interests,  they 
would  have  purchased  all  the  goods  they  needed  at  their 
own  store  besides  inducing  all  their  friends  to  do  the 
same.  If  they  had  done  this  our  sales  would  have  been 
increased  fully  13,000  more  with  very  little  (if  any) 
more  expense,  and  at  the  same  rate  of  profit  we  would 
have  been  enabled  to  declare  a  twelve  per  cent  dividend 
instead  of  an  eight  per  cent  one. 

"I  do  not  like  to  find  fault,  but  a  great  many  of  our 
shareholders  cause  the  association  considerable  expense 
by  calling  for  goods  at  unreasonable  hours ;  by  waiting 
with  their  orders  till  the  rush  succeeding  the  monthly 
pay  day,  and  by  being  over-particular  and  exacting  in 
purchasing  and  judging  the  goods  they  purchase.  They 
are  of  the  opinion,  I  presume,  that  as  they  are  owners  of 
the  establishment  their  whims  and  fancies  must  be  grat- 
ified. For  instance :  One  man  while  a  shareholder 
could  not  be  pleased  or  satisfied  with  the  goods  sent  him 
and  withdrew  his  capital  from  the  association.  After  a 
month  or  so  he  again  began  to  buy  regularly  from  us, 
and  he  is  now  as  easily  pleased  as  any  one.  Our  share- 
holders ought  to  remember  that  the  greater  expense  they 
cause  the  association  the  less,  their  dividends  must  be. 
Therefore  shareholders  ought  to  see  that  two  ideas  are 
fully  carried  out :  First,  that  all  the  trade  they  can 
command  or  persuade  be  given  to  the  association,  and 
secondly,  that  they  cause  the  association  .as  little  expense 
as  possible.  These  principles  fully  carried  out,  the 
greatest  measure  of  success  will  be  obtained. 

**To  carry  on  the  business  successfully  a  sufficiency  of 
capital  is  necessary,  and  the  association  must  look  to  its 
members  to  furnish  it.  They  cannot  expect  to  become 
millionaires  from  an  investment  of  five  or  ten  dollars. 
If  we  had  enough  capital  we  could  start  a  dry  goods 
department  as  well  as  many  other  lines.  Every  one  has 
to  purchase  dry  goods,  etc.,  and  our  members  might  as 


OTHBK   SUCCESSFUL   STORES.  95 

well  be  saving  for  themselyes  the  profits  now  given  to 
others  on  these  articles.  This  association  pays  eight  per 
cent  on  cash  paid  in  on  capital  after  the  expenses  of 
management  and  before  any  other  deduction  is  made 
from  the  profits,  and  this  dividend  begins  to  accrue 
almost  from  the  time  the  money  is  given  to  the  associa- 
tion. Where  can  you  find  any  savings  institution  that 
pays  eight  per  cent  interest  on  money  or  one  that  can 
furnish  better  security  than  is  furnished  by  our  associa- 
tion ?  It  is  therefore  beneficial  for  any  one  to  place  his 
surplus  earnings  in  as  capital  in  the  association,  and  its 
manager,  having  money  enough  to  promptly  pay  for  the 
goods  he  buys,  will  be  enabled  to  make  increased  profits 
and  will  allow  the  association  to  pay  larger  dividends. 
We  can  make  seven  per  cent  within  a  day  after  you  give 
us  the  capital  by  discounting  the  bills  due  for  merchan- 
dise, and  these  profits  go  to  swell  your  dividends.  The 
security  the  association  offers  is  a  lot  and  block  of  build- 
ings that  cannot  be  bought  or  built  for  $6,000,  a  stock 
of  merchandise  worth  at  wholesale  prices  $8,900,  horses, 
wagons,  scales,  etc.,  in  good  repair  worth  over  $1,000, 
book  accounts  due  the  association  and  worth  $3,500, 
cash  on  hand  amounting  to  $1,533.  Against  these  assets 
we  owe  $6,060,  leaving  a  balance  of  $11,870  to  furnish 
security  to  the  most  skeptical.  Any  business  man 
would  be  willing  to  accept  of  such  security  at  any  time, 
and  our  experience  has  been  that  good  business  men, 
after  thoroughly  investigating  our  securities,  have  told 
us  that  we  could  obtain  credit  from  them  for  any  amount 
we  needed. 

"Remember  that  the  cooperative  store  is  your  store. 
You  are  shareholders  and  should  trade  or  buy  at  your 
own  store.  Remember  that  you  are  assured  full  weights 
and  measures  and  that  the  article  will  be  of  the  quality 
you  buy  ;  that  you  in  the  first  place  buy  it  as  cheaply  in 
general  from  the  association  as  you  can  anywhere  else 


96  HOW  TO  OOOPBRATB. 

(if  you  buy  cheaper  you  generally  buy  an  inferior  article 
or  in  smaller  quantity),  and  secondly,  besides  getting 
large  interest  on  your  money  you  get  a  reduction  on  the 
cost  of  your  goods  of  from  three  to  eight  per  cent. 
This  reduction  you  do  not  get  if  you  buy  elsewhere. 
Remember  that  you  are  building  up  an  institution  that 
in  times  of  depression  may  be  enabled  to  benefit  its 
members  by  furnishing  them  employment,  the  profits 
from  which  will  go  to  those  who  do  the  work,  not  to  a 
favored  few." 

The  Kind  of  Men. — The  membership  at  Lyons  em- 
braces all  sorts  of  people — foreign  as  well  as  native  born. 
They  were  no  more  likely  to  work  in  harmony  than  a 
like  number  of  workingmen  of  equal  skill  and  intelli- 
gence in  any  town.  The  president  for  the  past  two 
years,  S.  A.  Sleight,  is  a  carpenter,  born  in  Delaware 
County,  N.  Y.,  in  1835,  who  has  followed  his  trade 
since  he  left  the  farm  at  twenty-one,  save  two  years  in 
the  army.  The  treasurer  from  the  start,  J.  G.  Lollick, 
received  a  good  common  school  education  in  Denmark, 
his  native  country,  farmed  it  there  until  1873,  when  he 
went  into  the  Iowa  lumber  yards,  and  is  now  with  a 
lumber  firm.  The  secretary,  whose  painstaking  reports 
are  models  of  completeness  and  cleverness,  is  a  native  of 
Prince  Edward  Island,  graduated  at  the  Prince  of  Wales 
college  there  in  1869,  and  is  now  forty  years  old.  He 
taught  school  for  ten  years,  and  in  1880  removed  to 
Lyons,  where  he  entered  the  employ  of  Gardiner,  Batch- 
elder  &  Welles,  lumber  manufacturers.  He  became  su- 
perintendent of  the  shipping  department  the  same  year, 
and  still  holds  the  position.  He  has  filled  various  city 
offices  and  has  been  secretary  of  the  "  Coops  "  from  tlie 
start  by  unanimous  reelection.  Thomas  H.  Angell,  the 
manager  and  buyer  for  the  grocery  department,  is  an 
Illinoisan,  now  in  his  twenty-eighth  year,  who  was  edu- 
cated in  the  common  schools  of  his  native  county.  White- 


OTHER   SUCCESSFUL   STORES.  97 

side,  farmed  until  he  was  twenty,  then  worked  in  a  livery 
stable  one  year,  and  in  1882  entered  the  employ  of  the 
above  named  firm  in  Lyons  and  continued  with  them 
until  he  took  charge  of  the  association's  affairs  Aug.  12, 
1887.  The  usually  unprofitable  (to  cooperators)  meat 
department  has  been  very  successful  in  this  case  through 
the  management  of  Henry  Maass,  a  thrifty  and  steady- 
going  German  thirty-four  years  old,  who  had  had  long 
experience  in  the  business  in  Germany  and  also  in  Iowa. 
The  clothing  department  is  in  charge  of  Charles  U. 
Ilenle,  twenty-seven  years  old,  who  was  born  in  Lyons, 
attended  St.  Vincent's  college,  and  spent  ten  years  in 
two  of  the  leading  clothing  houses  in  Lyons,  so  that  he 
brought  a  thorough  knowledge  of  the  business  to  the 
''Coops." 

THE  TRENTON    COOPERATIVE   ASSOCIATION. 

A  Big  Dividend  Payer. — This  "Coop"  enjoys  the 
honor  of  paying  the  largest  dividend  upon  purchases  of 
any  cooperative  store  in  the  country — twelve  to  fourteen 
per  cent.  Extremely  careful  management  and  cash  deal- 
ings are  the  real  reasons  for  the  success,  but  the  compar- 
atively high  retail  prices  current  at  Trenton,  ^ew  Jer- 
sey, account  for  the  abnormal  size  of  the  dividend.  The 
store  maintained  full  retail  prices  from  the  start.  It 
was  an  outgrowth  of  labor  disturbances  early  in  1885, 
and  began  business  on  May  5  of  that  year  with  ninety 
members  holding  one  hundred  and  twenty  shares  of  five 
dollars  each,  upon  which  one  hundred  and  fifty  dol- 
lars was  actually  paid  in,  the  balance  being  collected  at 
the  rate  of  not  less  than  fifty  cents  per  week.  Member- 
ship was  open  to  all,  and  the  by-laws  are  on  the  true 
Koch  dale  lines.  Five  per  cent  of  the  net  profits  go  to 
the  surplus,  one  and  one-half  per  cent  interest  quarterly 
is  paid  on  capital,  and  the  balance  is  declared  in  divi- 
7 


98  HOW  TO  COOPERATE. 

dend  on  employes  wages  and  on  sales.     Indeed,  the  pre- 
cise objects  of  the  society  are  : 

First.  To  supply  its  members  and  others  with  articles  for  household 
and  personal  use  that  are  unadulterated  and  of  good  quality. 

Second.  To  buy  such  articles  at  wholesale,  to  sell  the  same  for  reta'l, 
and  to  divide  the  profits  thus  realized  among  its  members  and  others 
in  proportion  as  they  have  contributed  to  the  production  of  said  profit 
by  their  capital,  labor  or  custom. 

Third.  To  provide  a  safe  and  profitable  Investment  for  the  capital 
saved,  in  small  sums,  by  its  members. 

In  thus  sharing  profits  with  Employes  (who  are 
also  shareholders),  Trenton  surpasses  Arlington,  but  it 
does  not  pay  its  help  quite  as  large  wages  outright. 
Each  member  has  but  one  vote,  and  ''no  member  in 
arrears  to  this  society  on  any  account  whatever,  two  days 
previous  to  any  meeting,  shall  be  entitled  to  vote."  The 
president  and  treasurer,  with  eight  others,  constitute  the 
directors  ;  three  successive  absences  from  directors'  meet- 
ings, without  satisfactory  cause,  vacates  the  place  of  such 
absentee.  All  payments  for  goods  are  by  bank  check 
signed  by  the  treasurer,  and  countersigned  by  the  secre- 
tary and  manager,  and  the  oflBcers  can  only  borrow 
money  when  authorized  by  vote  of  the  society.  Other- 
wise the  by-laws  (also  auditing  and  inventorying)  are 
essentially  like  Arlington's,  with  some  differences  on 
important  points,  as  follows  : 

Article  III,  Sec.  4.  Any  member  of  the  board  of  directors,  or  other 
oflicer,  who  shall  accept  any  other  office  or  place  of  profit  in  this  soci- 
ety shall  first  resign  the  one  held  by  him  before  entering  upon  the 
duties  of  the  new  office  to  which  he  has  been  elected  or  appointed ;  this 
rule  shall  not  apply  to  any  officer  who  may  be  elected  to  represent  the 
society  in  any  wliolesale  co5perative  society  of  which  it  may  become  a 
member.  No  member  of  the  board  of  directors  shall  be  intei-ested  in 
any  contract  with  the  society,  excepting  when  he  is  a  member  of  a  firm 
or  company  which  has  entered  into  contract  with  or  has  done  work  for 
the  society,  in  which  case  he  shall  not  be  present  or  vote  when  such 
contracts  are  being  discussed  or  acted  upon. 

Art.  Ill,  Sec.  11.  At  the  regular  annual  meeting  in  each  year  an  aud- 
iting committee  of  three  members  shall  be  elected  to  serve,  for  one 
year,  and  until  their  successors  are  elected  and  qualify;  no  member 
shall  be  eligible  to  serve  on  the  aiiditing  committee  who  holds  any 
other  position  of  honor,  trust  or  profit  in  tlie  society;  it  shall  have 


OTHER   SUCCESSFUL   STOKES.  99 

power  to  employ  experts  at  tlie  expense  of  the  society,  if,  in  their  judg- 
ment, tliis  is  necessary ;  it  shall  audit  the  accounts  of  the  society  quar- 
terly, and  if  found  correct,  shall  so  certify  on  the  books  of  account;  it 
shall  lay  before  each  quarterly  meeting  a  balance  of  the  receipts  and 
expenditures,  also  of  the  assets  and  liabilities  of  the  society,  togetlier 
with  a  statement  of  the  business  of  the  society  for  the  last  quarter, 
and  its  then  condition  ;  it  sliall  have  power  to  call  for  and  examine  all 
books,  papers  and  documents  belonging  to  the  society,  and  examine 
any  officer,  employe,  member  or  other  pei'sons,  as  witnesses ;  tlie  bal- 
ance sheet  shall  bear  its  certificate  of  correctness.  In  case  a  vacancy 
occurs  in  the  auditing  committee,  the  board  of  directors  shall  have 
power  to  fill  the  vacancy  until  the  next  quarterly  meeting  of  the  soci- 
ety, and  the  meeting  shall  elect  a  person  to  fill  the  vacancy  for  the 
unexpired  term. 

Art.  IV,  Sec.  4.  All  share-certificates  shall  be  transferable  to  persons 
approved  by  the  board  of  directors;  such  approval  to  be  given  before 
the  transfer  can  be  made;  the  society  reserves  the  right  to  purcliase 
all  shares  where  the  approval  of  the  board  to  transfer  is  not  granted, 
at  a  price  not  to  exceed  the  book  value  of  said  share  or  shares. 

Sec.  6.  A  member  being  in  distress  may  withdraw  any  withdrawable 
capital  he  may  have  in  the  society,  at  the  discretion  of  the  board  of 
directors. 

Sec.  7.  Should  the  board  of  directors  have  more  cash  on  hand  than 
they  can  profitably  invest,  they  shall  have  the  power  to  reduce  the 
number  of  shares  by  retiring,  at  par  value,  a  sufficient  number  from 
those  members  who  hold  the  largest  amount;  members  may  allow 
their  surplus  cash  to  remain  in  the  funds  of  the  society,  but  shall  not 
receive  interest  thereon. 

The  Members  are  mostly  men  who  work  in  the  pot- 
teries or  the  factories,  of  all  nationalities,  Scotch,  Eng- 
lish, Americans  and  Germans  being  represented  in  the 
present  board  of  directors.  The  officers  are  all  under 
bonds.  The  secretary,  Benjamin  Holland,  who  is  the 
bookkeeper  and  accountant,  was  formerly  a  member  of 
the  Tiinstall  (England)  cooperative  society,  but  while 
informed  as  to  cooperation  liad  had  no  practical  experi- 
ence in  it ;  he  was  a  bookkeeper.  The  manager  of  the 
stores,  Frank  Glenn,  a  bright  American,  had  been  work- 
ing in  a  grocery  store  when  he  accepted  tliis  place. 

How  It  Grew. — The  store  met  the  usual  opposition 
from  grocers  and  dealers.  Its  worst  fight  came  when  it 
embarked  in  the  coal  business,  as  the  retailers  would 
not  admit  it  to  the  combination.  However,  the  "Coop" 
found  it  easy  to  buy  coal  as  cheaply  as  any  one  since  it 


100 


HOW  TO  COOPEBATE. 


had  the  cash  to  pay  for  coal,  while  it  maintained  full 
retail  prices.  The  sales  of  coal  and  wood  the  first  three 
months  (Sept.  26  to  Dec.  31,  1890)  were  $3,295,  which 
showed  a  gross  profit  of  $1,066  (thirty-three  per  cent)  and 


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Fio.  9.    Thos.  H.  AifOELi.,  Manager  of  the  Lyons  Cooperattvb 
Association. 

a  net  profit  of  $614,  or  over  seventeen  per  cent,  which 
was  divided  in  the  usual  way.  Such  profits  were  a  reve- 
lation, and  naturally  the  quarterly  report  is  the  only 
advertising  the  store  requires.  It  is  only  a  question  of 
time  when  the  "  Coop"  will  absorb  the  bulk  of  the  cash 


OTHEB  SUCCESSFUL  STORES.  101 

retail  trade  at  Trenton,  as  is  already  proving  the  case 
at  Lawrence. 

The  store  had  five  hundred  and  sixty  members  July  1 , 
1891,  the  total  number  of  members  registered  from  the 
start  being  nine  hundred  and  twenty-seven.  About  two- 
thirds  of  the  trade  is  to  members,  the  rest  to  non-mem- 
bers, who  get  only  half  the  usual  dividend.  Monthly 
meetings  of  both  members  and  directors  are  held,  to 
which  a  financial  statement  is  submitted.  At  every 
third  meeting  the  quarterly  statement  is  presented.  As 
usual  with  the  most  successful  stores,  the  attendance  of 
members  at  these  meetings  is  light,  there  being  only 
from  twenty  to  fifty  persons  present.  The  society  owns 
its  main  store,  which  has  two  halls  above  that  are  rented. 
It  also  owns  its  stables.  This  property  is  to-day  worth 
over  120,000,  though  it  cost  with  improvements  only 
$16,500,  and  stands  on  the  books  at  $14,485,  nearly 
$4,000  having  been  charged  off  to  depreciation  account. 
Two  and  one-half  per  cent  is  also  charged  off  quarterly 
for  the  depreciation  of  fixtures.  The  society  employs 
two  order  wagons  and  three  delivery  wagons.  One  mana- 
ger, one  secretary,  two  butchers,  seven  grocery  clerks, 
one  hostler  and  one  coal  clerk.  The  same  system  of 
trading  with  outside  stores  that  is  practiced  by  the  Ar- 
lington society  is  followed. 

The  Business  is  Practically  all  Cash. — The 
cashier  or  bookkeeper  recognizes  only  cash  transactions. 
If  any  credit  is  given,  it  is  done  on  the  responsibility  of 
the  store  manager,  and  a  record  of  it  kept  in  the  mana- 
ger's book  on  the  counter.  Credit  is  never  given  in 
excess  of  a  member's  holdings  of  capital,  which  is  made 
liable  for  debts.  A  somewhat  different  system  of  store 
management  than  at  Arlington  is  used.  The  member 
gets  an  itemized  receipted  bill  for  his  purchases  instead 
of  the  usual  check.  A  duplicate  of  this  receipt  is  handed 
in  to  the  cashier,  who  writes  up  the  same  in  the  mem- 


102  HOW  TO   COOPEEATB. 

ber's  pass-book  and  also  under  the  member's  account  in 
the  ledger.  The  member  can  thus  audit  his  own  ac- 
count, having  the  vouchers  to  compare  with  his  pass- 
book. Non-members  receive  the  ordinary  check,  as  no 
accounts  are  kept  with  them.  Each  member  thus  has 
also  a  means  of  insuring  the  honesty  of  both  the  store 
clerks  and  the  bookkeeper.  The  manager  of  the  store 
has  nothing  to  do  with  the  cashier  or  bookkeeper  except 
to  make  his  own  cash  and  sales  correspond  with  the  slips 
turned  into  the  office.  What  little  credit  is  allowed  is 
always  paid  up  in  full  before  the  quarterly  report  is 
finally  closed. 

The  dividends  are  paid  in  cash  to  members.  They 
actually  handle  the  money,  and  this  gives  tbem  more 
confidence  in  the  store  than  if  the  "divy"  was  simply 
passed  to  their  credit  on  the  books.  By  this  method, 
however,  the  members  do  not  accumulate  as  much  capi- 
tal as  they  otherwise  would.  They  are,  of  course, 
invited  to  invest  their  dividend  in  more  shares,  but  the 
increase  of  capital  has  only  been  gradual.  When  asked 
why  they  did  not  reduce  their  dividend  and  use  part  of 
their  profits  to  pay  off  their  mortgage,  Secretary  Holland 
replied  that  they  didn't  need  to,  since  they  only  had  to 
pay  six  per  cent  interest  on  the  money,  and  it  was  as 
cht.'p  to  have  the  capital  in  that  form  as  in  shares.  We 
differ  emphatically  from  this  reasoning,  however,  and 
regard  this  as  the  weakest  point  in  tlie  Trenton  society, 
which  borrowed  $2,000  more  this  spring  for  further  pur- 
chases of  real  estate.  Nevertheless,  it  will  be  noted 
that  reserves,  mcluding  reserve  and  educational  fund, 
amount  to  $5,225,  in  which  the  society  is  in  the  habit  of 
figuring  the  amount  allowed  for  depreciation  on  real 
estate,  which  swells  the  total  reserve  to  over  19,000,  or 
seventy-five  per  cent  of  the  share  capital.  The  remark- 
ably good  management  and  steady  progress  of  the  Tren- 
ton society  is  shown  by  the  following  annual  comparison : 


OTHER  StrcCESSFTJL  STORES. 


103 


Year  of  Business 

Capital  at  close  of  year  — 

Total  sales 

Gross  profits 

Expenses 

Net  profits 

Per  cent  expenses  to  sales 
Per  cent  profits  to  capital.. 
Per  cent  dividends 


1885. 

1886. 

$  5,787 

1887. 

$  8,844 

1888. 

$  9,201 

1889. 

$  9,823 

$  2,430 

15,210 

49,958 

93,592 

97,520 

84,527 

3,394 

11,753 

22,952 

22,882 

20,757 

2,174 

5,100 

7,643 

8,385 

7,880 

1,220 

6,653 

15,309 

14,497 

12,877 

14.2 

10.2 

8.1 

8.6 

9.3 

51 

115 

173 

157 

131 

8 

14 

15 

13 

14 

1890. 

$11,745 

90,440 

23,488 

8,590 

14,898 

9.5 

127 

14 


The  total  sales  for  the  six  years  are  $431,247;  total 
profits,  $65,454,  of  which  within  a  fraction  of  $60,000 
have  been  paid  back  to  customers  in  dividends  and  inter- 
est, and  the  balance  placed  to  reserve  account.  The 
dividends  have  averaged  thirteen  per  cent  and  interest 
six  per  cent,  a  return  equal  to  one  hundred  and  twenty- 
six  per  cent  per  annum  on  the  share  capital  reported  at 
the  close  of  the  year.  The  expenses  averaged  nine  and 
nine-tenths  (practically  ten)  per  cent  on  the  sales. 

A  Still  Better  View  of  the  business  will  be  gained 
from  the  following  annual  statement  for  the  year  ended 
Dec.  31,  1890 : 

Sixth  Annual  Statement  of  the 

TRENTON  COOPERATIVE  ASSOCIATION. 


General  Statement. 


Assets. 


Inventory  of  groceries  and 
l)rovlslons  Jan.  1, 1891. 

Main  store $6,015  16 

Hranch  store 904  50 


I^ess  ten  per  cent. 


$6,919  66 
691  96 


Net  inventories 6,227  70 

Fixture  account 4,436  79 

Iloal  estate  (less  deprecia- 
tion)   14,485  38 

Cash  account 1,000  00 

Cash  balance 3,289  45 


Total  assets $29,439  32       Total  liabilities 


Liabilities. 


Share  capital $11 ,744  87 

Divideua  and  interest  (due 

Jan.  1) 3,419  65 

Reserve  fund 3,584  03 

Educational  fund 1,040  55 

Land  fund  (anit.  depreci- 
ation)   3.931  53 

Mortgage 5,000  00 

Balance  undivided 118  69 


9,439  32 


104 


HOW  TO   COOPERATE. 


Cash  Account. 


Receipts. 

Cash  balance,  Jan.  1, 1890.  $4,757  75 

Casli  on  sales 87,145  37 

Entrance  fees 22  75 

Rent  from  halls 521  78 

Horse  board,  etc 250  35 

Fixturessold 50  00 

Cash  on  shares 4,584  37 


Total  receipts $97,332  37 


Expe}iditure. 


Mdse.  purchased 

Salaries  paid  — 

Expense  account 

Fixture  and  or- 
ganization   

Dividend  and  in- 
terest acct Iw  o  J 

Shares  withdrawn 

Coal  account 

Real  estate  account 

Mortgage  account 

Cash  balance  Jan.  1, 1891 


P.- 


.$65,424  23 

.  6,692  25 

.  1,860  18 

.  1,605  41 

.  12,036  42 

.  2,662  65 

.  1,000  00 

.  1,761  78 

.  1,000  00 

.  3,289  45 


Total $97,332  37 


Share  Capital. 


Receipts. 


Balance  Jan.  1, 1890 $9,823  15 

Received  since 4,584  37 


Total . 


Expenditure. 


Withdrawn $2,662  65 

Balance 11,744  87 


,407  52       Total $14,407  52 


Merchandise  Account. 


Groceries  and  provisions 

on  liand  Jan.  1,  1891 $6,919  66 

Less  ten  per  cent 691  96 


Cash  on  sales. 


6,227  70 
87,145  37 


Total $93,373  07 


Groceries  and  provisions 

on  hand  Jan.  1, 1890 

Less  ten  per  cent 


(5,140  23 
614  02 


5,526  21 

Purchased  since 65,424  23 

Gross  profits 22,422  63 

Total $93,373  07 


Disposal  of  Gross  Profits. 


Gross  profits $22,422  63 


Salary  account $6,692  25 

Expense  account 1,448  15 

Net  profits 14,282  23 


Total $22,422  63        Total $22,422  (i3 


Disposal  of  Net  Profits. 


Undivided  Jan.  4, 1890 $1.30  95 

Net  profits  for  year  1890. . .    14,282  23 


Total  net  profits $14,413  18 


Reserve  fund $747  48 

Educational  fund 355  05 

Dividend  an<l  interest 12,276  Wi 

Ajipropriat'ii  to  land  fund  915  10 
Balance    undivided   Jan. 

1.1891 118  G9 


Total $14,413  18 


We,  the  auditors,  have  examined  the  books  of  the  society,  and  cer- 
tify that  they  correspond  with  the  foregoing  statement: 


Jan.  16, 1891. 


Thomas  Mason, 
Charles  H.  Simmerman, 

CHAItLES  GEBERT. 


The  quarterly  statement  of  the  Trenton  is  explicit, 
businesslike  and  accurate.     It  is  made  up  in  the  same 


OTHER  SUCCESSFUL   STORES.  105 

form  as  the  above,  and  therefore  need  not  be  repeated. 
The  only  difference  is  that  the  disposal  of  net  profits  is 
described  more  in  detail.  Thus,  for  the  twenty-fourth 
quarter,  ended  March  31,  1891,  the  sales  were  $22,099, 
the  gross  profits  $5,432  and  the  net  profits  $3,484.  The 
latter  were  divided  as  follows :  Five  per  cent  to  the 
reserve  fund,  $180 ;  two  and  one-half  per  cent  to  the 
educational  fund,  $86 ;  one  and  one-half  per  cent  inter- 
est on  shares,  $170 ;  twelve  per  cent  dividend  on  mem- 
bers' trade  of  $19,732,  $2,368  ;  twelve  per  cent  dividend 
on  salaries,  $219  ;  six  per  cent  dividend  to  non-members, 
$131 ;  appropriation  to  land  fund  [allowed  for  deprecia- 
tion], $302  ;  balance  undivided,  $135. 

THE   ALLEGAliT   ASSOCIATION. 

A  Substantial  Success. — The  Cooperative  Associa- 
tion of  the  Patrons  of  Husbandry  of  Allegan  County, 
Michigan,  was  started  in  1875,  at  Allegan,  the  county 
seat.  This  section  of  the  southwestern  part  of  the  State 
is  within  the  Michigan  fruit  belt.  Allegan  itself  is  the 
center  of  a  rich  farming  and  lumbering  region,  the  place 
having  some  2,700  population  devoted  to  manufactures 
and  agriculture.  The  association  therefore  had  about 
the  environment  that  will  be  the  lot  of  most  cooperative 
efforts  in  rural  or  farming  communities.  It  does  quite 
a  business  in  shipping  to  city  markets  produce  for  the 
farmers  and  selling  it  on  commission. 

At  first  each  family  in  the  fifteen  granges  in  the 
county  made  out  a  list  of  the  goods  it  wanted  for  the 
next  thirty  days,  which  was  handed  to  the  grange  sec- 
retary, with  the  money  for  the  same,  and  forwarded  to 
a  central  purchasing  agent  (A.  Stegeman,  then  as  now 
the  prime  mover  in  the  matter),  by  whom  the  orders 
were  bulked,  the  goods  bought  to  the  best  advantage 
and  delivered  within  ten  days.  But  people  found  it  dif- 
ficult to  order  ahead,  goods  had  to  be  kept  in  stock,  so 


106  HOW  TO   COOPEEATE. 

the  concern  was  incorporated  with  the  above  title  in 
April,  1876,  with  $5,000,  to  which  Mr.  Stegeman  added, 
as  a  loan,  nearly  a  like  amount. 

Not  the  Rochdale  System. — Goods  were  and  are 
still  sold  at  cost,  with  four  per  cent  added  to  each  item 
of  purchases  in  the  members'  pass  book,  thus  : 

Name,  Goods  Bought  Four  Per  Cent  Total  Price 

James  Foster  $15.50  .62  $16.12 

The  four  per  cent  and  the  discount  on  goods  bought 
on  time  but  paid  for  in  cash,  with  the  earnings  on  sales 
of  fruit  and  produce  for  farmers,  are  the  main  sources 
of  income  with  which  to  pay  expenses  and  accumulate 
profits.  Persons  not  members  of  the  Grange  can  buy  a 
permit  to  trade  at  the  store  for  three  dollars  for  a  year 
or  one  dollar  for  three  months.  For  the  first  four  years 
the  profits  warranted  paying  ten  per  cent  interest  on  the 
capital,  but  this  was  regarded  as  usury  and  not  coopera- 
tion and  the  manager  insisted  upon  reducing  it  to  six 
per  cent,  which  was  agreed  to  after  a  heated  controversy. 
Membership  is  confined  to  the  order  of  Patrons  of  Hus- 
bandry, and  the  shares  (five  dollars)  are  transferable  to 
Patrons.  The  members  in  each  grange  who  hold  shares 
to  the  amount  of  two  hundred  dollars  are  entitled  to 
one  director,  each  shareholder  having  one  vote  and  also 
another  vote  for  each  additional  fifty  shares  owned. 
The  shares  are  withdrawable  upon  due  notice,  but  usu- 
ally such  notice  is  not  insisted  upon.  Consequently  the 
membership  varies,  having  been  as  high  as  527,  but  in 
April,  1891,  was  396.  The  capital  stock  has  been  as 
high  as  $40,000,  while  in  the  spring  of  1891  it  was  but 
little  over  one  half  that.  The  association  also  receives 
money  on  deposit,  payable  on  demand,  upon  which  five 
per  cent  interest  per  year  is  paid.  Such  deposits  are 
often  as  large  as  the  capital  stock  of  the  association,  so 
great  is  the  public  confidence  in  it,  and  are  withdrawn 
only  when  actually  needed. 


OTHER   SUCCESSFUL   STOEES. 


107 


Tried  by  Fire. — The  cooperative  store  was  burned 
at  a  total  loss  of  $50,000  (no  insurance)  worth  of  goods 
in  the  destructive  fire  that  visited  Allegan  at  noon  on 
March  14,  1884.  Some  $8,000  or  $10,000  worth  or  stock 
was  saved.  But  the  "Coops"  were  not  disheartened. 
By  eight  o'clock  the  next  morning  their  store  was  re- 
opened for  business  in  temporary  quarters,  the  sales  that 
day  being  over  $400.  The  store  sells  for  cash  only, 
except  that  it  handles  a  great  deal  of  fruit  and  produce 
for  its  farmer  members,  the  buyers  of  which  in  the  cities 
are  usually  allowed  thirty  days'  time.  The  records 
were  all  burned  in  the  fire,  but  since  1884,  may  be  thus 
summarized : 


1884,9  months. 

1885 

1886 

1887 

1888 

1889 

1890 

Total 

Average 


Total 

Gross 

Expenses 

Sales. 

Income. 

and  Int. 
84.181 

8123,551 

$6,067 

161,292 

8,060 

7,191 

169,701 

8,000 

7,279 

165,384 

8,590 

7,886 

159,736 

8,381 

8,069 

160,054 

8,786 

8,195 

192,827 

11,189 

9,331 

1,122,545 

59,073 

52,132 

8160,363 

88,439 

87,447 

81,886 
869 
721 
705 
312 
592 
1,858 
6,943 
992 


The  full  annual  statement  shows  a  gain  of  from  $2,000 
to  $5,000  per  year  in  net  assets  or  stock  on  hand,  in 
addition  to  the  balance  averaging  nearly  $1,000  a  year 
added  to  the  sinking  fund.  The  fund  thus  accumulated 
since  the  fire  amounts  to  nearly  $20,000.  No  interest  is 
paid  on  this  fund,  which  is  working  capital  free  of  cost. 
The  deposits  at  five  per  cent  also  make  cheap  capital. 
This  keeps  down  the  gross  sums  paid  in  interest  on  the 
regular  capital  stock,  which  has  varied  from  $30,000  to 
$20,000,  and  gives  the  association  money  enough  to 
transact  a  big  business. 

The  Light  Expenses  Explained. — A  sample  of 
the  monthly  statements  required  by  the  by-laws  to  be 
made  by  the  manager  to  the  directors  partly  explains 
the  secret  of  such  small  expenses.  It  is  as  follows : 
"Statement  for  May,  1890— Amount  of  sales,  $14,782.- 


108 


HOW  TO  COOPERATE. 


99;  percentage  on  same  at  4  per  cent,  $613.84;  cash 
discounts  on  bills  rendered  for  goods  bought,  $400 ; 
boxes  and  crates  sold,  etc.,  $32.78 ;  total  income,  $1,036.- 
62;  expenses,  $695.57;  surplus  to  balance,  $341.06. 
The  expenses  were:  Sixty-five  gallons  of  oil,  $6.82; 
washing,  75  cents;    rent,  $100;    postal  cards,  $1.00; 


Fig.  10.    New  Stoke  of  the  Allegan  County  CootEKATOKS. 

envelopes,  $21.80  ;  extra  help,  $10.20  ;  five  weeks'  wages 
of  regular  employes — Atkins  $75,  Stein  $50,  Tobin  $45, 
CoUoff  $50,  Bom  $40,  Robinson  $35,  Vinda  $35,  Dora 
$35,  Mrs.  Stegeman  $90,  A.  Stegeman  $100;  total  ex- 
penses, $695.57."  This  total  is  just  4.7  per  cent  on  the 
sales  for  the  month,  or  if  the  proportionate  amount  of 
interest  on  capital  were  added  the  expense  would  be  5.4 


OTHER  Successful  stores.  109 

per  cent  on  sales.  The  month  is  certainly  a  fair  sample 
of  the  business  as  will  be  seen  by  comparing  it  with  the 
seven  years'  average.  It  is  assumed  that  freight,  cart- 
age, telegrams,  express,  etc.,  are  paid  for  by  adding  to 
the  actual  cost  of  goods  an  amount  sufficient  to  cover 
these  items.  Thus  the  four  per  cent  commission  is  net 
for  the  actual  operating  expenses  included  in  the  state- 
ment for  May.  The  savings  in  not  having  to  deliver 
goods  to  customers,  and  by  doing  a  big  business  for  cash 
only,  are  also  large. 

The  Lessons  of  this  Success. — The  personal  ex- 
pei'ience  and  suggestions  of  the  man  who  has  accom- 
plished such  results  are  valuable.  Especially  is  this 
true  in  a  State  where  the  Allegan  "Coop"  is  the  sole 
survivor  of  twenty-eight  so-called  cooperative  stores 
started,  about  the  same  time  during  the  period  of  fervent 
but  uneducated  Grange  enthusiasm.  Moreover,  it  is  to 
be  noted  that  this  store  aimed  to  effect  its  savings  by 
giving  lower  prices,  instead  of  following  the  Rochdale 
system  of  charging  full  retail  values  and  dividing  profits 
in  rebates  to  purchasers.  Prices  have  not  been  cut  to 
an  extreme,  as  is  shown  by  the  gain  in  inventory  and 
surplus.     Mr.  Stegeman  writes  : 

"  Starting  out  as  we  did,  by  differing  from  all  other 
corporations  in  selling  goods  at  cost,  we  antagonized 
every  one  in  business.  The  general  public  is  not  aware 
that  in  mercantile  business  certain  standard  goods  that 
the  people  know  the  price  of  are  sold  as  leaders  at  but  a 
trifle  above  cost,  Avhile  others,  the  value  of  which  people 
cannot  tell  anything  about,  are  sold  at  thirty-tliree  to 
two  hundred  per  cent  profit.  These  facts  were,  of 
course,  revealed  by  our  system  of  selling  goods  at  cost, 
causing  the  public  to  accuse  the  other  dealers,  so  that 
the  feeling  that  was  aroused  against  the  grangers,  and 
especially  against  the  manager  of  their  store,  can  be 
readily  imagined.     No  stone  was  left  unturned  to  break 


110  HOW  TO   COOPERATE. 

up  the  association's  business,  bribery  and  threats  being 
alike  without  avail.  The  other  merchants  united  to 
break  our  standing  and  credit  and  tried  to  prevent 
wholesalers  from  dealing  with  us.  After  our  store  was 
burned  out,  knowing  that  I  had  personally  lost  my  all, 
a  party  offered  me  the  use  of  $30,000  to  go  into  business 
on  my  own  account  if  I  would  agree  not  to  run  a  grange 
store.  All  such  offers  were  declined,  the  other  efforts  of 
the  opposition  were  ignored,  and  the  cooperative  store 
went  right  on  with  its  work. 

Just  How  the  Store  is  Managed. — ''As  to  the 
actual  running  of  the  store,  we  have  never  advertised  or 
asked  people  to  come  and  trade  with  us.  We  do  not 
allow  'shopping.'  If  a  person  wishes  to  buy,  our  help 
will  serve  him ;  but,  if  he  simply  wants  to  see  what  we 
have  and  get  our  prices,  we  have  no  use  for  him.  For 
instance,  a  party  wanted  the  price  of  some  tools  to  see 
where  he  could  do  best.  I  said  :  '  Go  and  get  all  the 
prices  you  can ;  bring  them  to  me,  and  if  I  cannot  save 
you  money  I  will  advise  you  to  buy  where  it  will  serve 
your  interests  best,  but  I  can't  give  you  prices  to  take 
elsewhere  and  sell  us  out.'  He  claimed  that  he  was  a 
shareholder ;  it  was  my  business  to  post  him.  The  re- 
sult was  that  I  told  him  to  bring  his  pass  book  and  draw 
out  his  money.  There  is  not  a  mercantile  concern  in 
tins  section  that  would  not  have  sold  him  for  less  than 
cost  under  such  circumstances,  in  order  to  make  him 
dissatisfied  with  the  cooperative  store  and  undermine  its 
efforts. 

A  Stiff  Back  Bone  Needed.— "It  will  not  do  to 
allow  any  Judas  to  remain.  As  the  association  has 
always  been  able  to  meet  any  emergency,  it  has  held  the 
supremacy  over  all  fault-finding  or  dissatisfied  elements. 
They  knew  that  if  they  found  fault  without  cause  they 
would  be  requested  to  leave  and  informed  that  they  were 
not  worthy  to  have  the  benefits  of  our  system.     Indi- 


OTHER  SUCCESSFUL  STORES.  Ill 

rectly,  however,  the  general  public  have  profited  in  two 
ways  by  the  cooperative  stores  :  First,  goods  are  sold 
by  other  merchants  cheaper  than  in  any  other  place  in 
the  State,  on  account  of  our  being  here ;  second,  by  get- 
ting their  friends  to  come  in  here  and  buy  for  them. 
Still,  this  policy  has  a  wholesome  effect  on  others,  and 
since  we  sell  to  shareholders  and  those  who  are  not  mem- 
bers at  the  same  prices  there  has  not  been  a  great  de- 
mand for  the  shares. 

"Some  complain  that  they  don't  want  to  take  any 
shares  because  they  only  pay  six  per  cent — not  as  much 
as  they  could  get  elsewhere,  or  as  they  pay  on  the  mort- 
gage on  their  farms.  To  this  I  answer:  'You  believe 
in  this  cooperative  effort.  Do  you  know  that  it  has 
done  a  great  deal  for  you  and  the  people  in  this  part  of 
the  State  ?  If  so,  are  you  not  willing  to  help  sustain  a 
good  effort,  even  though  your  neighbor  is  small  enough 
to  accept  its  benefits  without  helping  to  furnish  the  cap- 
ital whereby  these  benefits  are  made  possible  ?  Would 
you  like  to  stand  in  his  place  and  play  his  unworthy 
part  ?  What  kind  of  a  man  would  it  be  that  you  saw  as 
you  looked  in  the  glass?'  This  reasoning  will  usually 
settle  the  matter  with  the  ordinary  fair-minded  person. 

"Among  the  Strong  Points  of  our  success  at  the 
start  was  my  ability  to  buy  goods  and  do  business  in  my 
own  name  in  the  interest  of  the  order  when  the  best 
markets  were  closed  against  all  cooperators.  Another 
strong  point  is  that  the  business  has  been  conducted  as 
though  no  one  had  anything  to  say  about  it  except  the 
manager.  The  stockholders,  directors  and  executive 
committee  have  always  had  all  the  latitude  they  wanted 
and  made  all  the  rules  they  wished.  Then  I  have  always 
done  what  I  thought  was  the  right  thing,  whereas  if  I 
had  always  done  as  the  stockholders  directed  the  asso- 
ciation would  not  now  be  doing  business.  I  know  of  no 
mistakes  that  we  have  made  unless  it  was  in  ever  having 


112  HOW  TO   COOPERATE. 

Started  ;  for,  in  the  sixteen  years  in  which  this  store  lias 
been  conducted,  I  have  yet  to  find  the  third  person  in 
whom  the  real  idea  of  genuine  cooperation  has  taken 
root.  Even  all  the  benefits  received  from  a  cooperative 
effort  are  used  competitively  and  mostly  as  such  by  the 
people.     So  long  as  this  is  the  case,  so  long  will  coopera- 


FiG.  11.    A.  Stegeman,  Manager  Allegan  Assoclvtion. 

tion  be  only  a  name.     The  average  man  comprehends 
^combine'  but  does  not  understand  cooperation." 

One  Useful  Lesson. — We  venture  to  suggest,  how- 
ever, that  the  failure  of  the  cooperative  idea  to  take 
root  in  Allegan  county  has  been  partly  due  to  the  fact 
that  the  shareholders  and  local  public  left  the  business 
very  largely  to  one  man.     This  gave  him  so  much  to  do 


OTHER  SUCCESSFUL  STORES.  113 

that  it  was  impossible  for  him  to  become  a  center  of 
education  in  the  principles  of  cooperation.  Had  the 
shareholders  and  patrons  of  the  store  held  frequent  meet- 
ings, set  aside  a  small  percentage  of  their  surplus  for 
literature  or  lectures  on  the  subject,  the  result  might 
have  been  different.  There  is  a  screw  loose  somewhere 
when  at  the  end  of  sixteen  years'  success  the  fear  is 
expressed  that  the  cooperative  istore  might  fail  under 
other  management.  It  illustrates  the  folly  of.  one-man 
power  exclusively.  It  emphasizes  also  the  great  impor- 
tance of  educating  cooperators  and  training  certain  mem- 
bers so  as  to  take  any  place  in  the  management  that  may 
suddenly  become  vacant.  The  Arlington  cooperators 
look  after  this  point  very  carefully. 

Comparison  with  the  Rochdale  Plan, — In  con- 
clusion Mr.  Stegeman  makes  the  following  arguments  in 
favor  of  his  management  (which  is  simply  a  close  imita- 
tion of  the  Civil  Service  system  of  London)  in  contrast 
to  the  regulation  Eochdale  system  :  ''One  cause  of 
failure  with  institutions  of  this  kind  is  the  want  of  an 
able  and  experienced  head  to  manage  it,  to  meet  compe- 
tition, to  reach  the  best  markets  and  to  get  prices  tliat 
cannot  be  beaten.  At  the  same  time  he  must  be  willing 
to  take  all  the  kicks  and  curses  from  those  inside  as  well 
as  from  those  outside  ;  willing  to  be  accused  of  all  man- 
ner of  wrong  doings  by  those  whom  he  has  helped,  an  I 
still,  for  the  sake  of  principle  and  the  needs  of  the  peo- 
ple, keep  right  on  regardless  of  all  that  is  said  and  done. 

*  'Another  reason  for  failure  is  the  attempt  to  under- 
sell other  stores  a  little,  just  to  get  all  the  trade  they 
can.  Other  stores  waste  a  great  deal  of  valuable  time 
on  customers  who  are  really  hunting  for  prices  or  look- 
ing at  goods  without  intending  to  buy.  Then  they 
make  a  mistake  at  the  end  of  the  first  six  months  or 
year  in  trying  to  pay  a  dividend  to  stockholders  that 
will  satisfy  them  and  another  to  customers. 
8 


114  HOW  TO  COOPERATE. 

"  This  manner  of  conducting  the  business  is  very  ex- 
pensive and  seldom  meets  the  acceptation  of  those  inter- 
ested. The  question  is  at  once  raised :  '  I  wonder  if 
things  are  all  right?'  The  opposition  will  not  fail  to 
improve  such  opportunities  to  sow  all  the  seeds  of  dis- 
cord it  can  find  ground  for.  Tlie  result  is  that  after  a 
little  while  people  say,  *  0,  there  is  nothing  in  this  coop- 
eration, I  can  buy  just  as  cheap  or  cheaper  at  the  other 
stores.  The  fellows  who  run  the  cooperative  store  are 
getting  rich  and  our  profits  don't  amount  to  anything. 
I  am  going  to  get  my  money  out  before  the  thing  goes 
down,'  etc.,  etc.  Then  the  end  is  sure  to  come,  being 
only  a  question  of  time.  " 

One  can  but  reflect,  however,  that  this  association 
would  be  on  a  far  more  enduring  basis  had  its  able  man- 
ager conducted  it  on  true  Eochdale  lines.  Its  patrons, 
too,  would  now  have  handsome  savings  to  their  credit, 
whereas  most  of  them  probably  have  little  to  show  for 
the  money  saved  by  purchasing  at  reduced  prices.  This 
is  the  weakness  of  the  Civil  Service  system,  while  in  the 
opposite  lies  Rochdale's  strength. 

THE   JOHNSON  COUNTY   COOPERATIVE   ASSOCIATION. 

The  Most  Notable  Success  in  cooperation  in  Kan- 
sas is  the  above  association,  located  at  Olathe.  It  was 
organized  June  14,  1876,  at  the  height  of  the  wave  of 
enthusiasm  for  cooperation  created  by  the  Patrons  of 
Husbandry.  Unlike  most  efforts  of  the  kind,  the  prime 
mover  in  this  society  was  a  man  thoroughly  imbued  with 
the  true  principles  of  cooperation,  and  who  was  also 
experienced  in  business  matters  as  well  as  in  farming — 
W.  H.  Toothaker,  then  master  of  the  Kansas  Stale 
grange,  who  was  president  of  the  association  for  nearly 
ten  years.  He  was  succeeded  in  the  management  by 
H.  C.  Livermore,  who  is  still  retained.  These  coopera- 
tors  also  operate  the  Patrons'  cooperative  bank  at  the 


OTHER   SUCCESSFUL   STORES. 


115 


same  place,  which  is  described  in  the  chapter  on  that 
subject. 

From  the  outset  the  Kochdale  plan  was  followed  in  its 
purity,  including  actual  cash  transactions  to  the  fullest 
possible  extent.  Credit  was  allowed  not  to  exceed  thirty 
dollars,  and  never  in  excess  of  the  member's  share  capi- 
tal, against  which  such  credit  was  a  lien.  The  only 
exception  was  on  the  sales  of  farm  machinery,  for  which 
when  necessary  negotiable  short-time  notes  are  taken 
from  those  in  whose  credit  the  management  has  perfect 
confidence.  The  by-laws  are  printed  in  full  in  the  Ap- 
pendix. The  store  was  opened  July  27,  1876,  with  $800 
of  cash  capital  paid  in  by  the  60  members,  which  has 
since  grown  to  $100,000  held  by  700  members.  From 
the  start  full  retail  prices  were  maintained  with  rery 
little  cutting,  and  the  same  price  was  charged  to  all  cus- 
tomers. Purchases  were  kept  account  of  by  issuing 
metallic  checks  to  purchasers  at  the  time  purchases  are 
paid  for.  These  checks  are  in  denominations  of  five, 
ten,  twenty-five  and  fifty  cents,  and  one,  two,  five  and 
twenty-five  dollars.  The  dividend  is  based  on  the  five 
and  twenty-five  dollar  check  issued  during  the  quarter. 

The  Progress  of  the  Concern  is  best  shown  by  the 
following  table : 


Questions  Nos.  4  and  6. 

Capital. 

Sales. 

Profits  less 

Ititerest 
&  Expense. 

Jnlv  27,  1876  to  July  1, 1877, 

i         800.00 

84,191.31 
105,258.68 

%     41,598.86 
69,177.32 
99,848.85 
158,421.54 
189,177.84 
243,100.88 
266,040.15 
266,299.52 
252,995.78 
210,654.81 
196,331.55 
232,501.94 
246,016.01 
228,485.69 
268,057.72 

$      1,351.49 

.Jlil'v  1,  1877  to  July  1,  1878, 

2,149.69 

July  1,  1878  to  July  1.  1879, 

4,846.84 

July  1,  1879  to  July  1,  1880, 

10,775.54 

July  1,  1880  to  July  1,  1881, 

11,402.60 

July  1,  1881  to  July  1,  1882, 

14,847.85 

July  1,  1882  to  July  1,  1883, 

18.006.21 

July  1,  1883  to  July  1,  1884, 

15,305.12 

July  1,  1884to.Tuly  1,  1885,--- 

July  1,  1885  to  July  1,  1886 

11,683.21 
10,438.41 

.July  1,  1886  to  July  1,  1887, 

9,313.56 

July  1,  1887  to  ,Inly  1,  1888, 

12,702.59 

July  1,  1888  to  July  1,  18K!), 

13.807.33 

July  1,  1889  to  July  1,  1890, 

12,444.77 

July  1,  1890  to  July  1,  1891, 

15,722.48 

Total 

2,968,808.46 

176,601.36 

116  HOW   TO   COOPERATE. 

It  will  be  seen  that  progress  has  been  steady,  notwith- 
standing the  recent  agricultural  depression  which  ac- 
counts for  the  partial  falling  off  in  business.  The  divi- 
dends have  ranged  from  six  to  ten  per  cent  on  the  cash 
sales,  averaging  six  per  cent  for  the  whole  fifteen  years, 
besides  which  a  large  surplus  has  been  accumulated. 
The  sinking  fund  is  $29,000.  The  association  has  a 
stock  of  goods  valued  at  160,000,  has  six  branches  in 
other  towns  in  the  county,  and  is  about  to  start  the  sev- 
enth. There  are  three  branch  stores  in  the  county  cov- 
ering a  stock  of  goods  of  about  $7,000  each — Edgerton, 
Stanley  and  Gardner.  The  sales  in  fifteen  years  have 
been  three  million  dollars  and  now  average  nearly  $1000 
a  day. 

The  Great  Building  and  Trade. — Whereas  the 
main  store  occupied  only  a  small  rented  room  at  first,  it 
now  owns  the  magnificent  building  elsewhere  illustrated, 
which  was  built  and  equipped  at  a  cost  of  $50,000.  It 
is  three  stories  high,  118x120  feet.  The  business  re- 
quires all  the  four  stores  on  the  first  floor, — one  for 
hardware  and  agricultural  implements,  another  for  gro- 
ceries and  meats,  both  fresh  and  salted,  a  third  for  gen- 
tlemen's furnishing  goods,  both  custom-made  and  in  the 
cloth,  and  the  fourth  the  ladies'  furnishing  department. 
In  the  second  story  some  offices  are  rented.  There  is 
also  storage  room  for  goods  and  the  printing  and  pub- 
lishing office  of  the  Kansas  Patron,  the  official  organ  of 
the  State  grange,  which  is  owned  and  published  by 
the  association.  To  its  editor,  George  Black,  we  are 
indebted  for  much  information,  who  states  that  the  asso- 
ciation owns  all  the  real  estate  in  which  it  does  business. 
Seventeen  clerks  are  employed  at  the  main  store  in 
Olathe,  and  seven  more  at  the  branches,  who  are  paid 
from  $30  per  month  to  $700  per  year.  The  general 
manager  is  paid  $200  a  month  and  the  cashier  $1,000 
per  year,  the  directors  getting  two  dollars  a  day  when  in 


OTHEB  SUCCESSFUL  STORES.  117 

session.  The  store  also  purchases  for  cash  all  saleable 
produce  purchased  by  farmers,  leaviug  them  free  to  buy 
their  supplies  where  they  wish.  The  benefits  of  the 
store  are  confined  to  Patrons  of  Husbandry  strictly.  It 
should  be  noted  that  the  increase  in  capital  and  surplus 
and  the  real  estate  and  buildings  owned  by  the  associa- 
tion have  been  largely  accumulated  from  its  earnings. 
The  quarterly  report  is  not  as  complete  as  those  pub- 
lished by  many  other  societies.  For  the  four  quarters, 
from  July  1,  1890,  to  July  1,  1891,  the  reports  may  be 
summarized  as  follows,  each  report  being  duly  certified 
to  by  the  auditors  and  invoicers : 

QUAKTEKLY  STATEMENT  FOB  YEAR  ENDED  JULY  1,  1891. 

No.  of  quarter 58th.  59th.  60th. 

Capital  stock §  59,791.28       $  64,820,20     $  77,335,91 

Surplus  fund 26,242,10  27,922.77  27,922.77 

Total  capital $  86,033.38      $  92,742.97     $105,258.68 


AVEUAGB  DAILY  SALES.      I  MONTHLY  SALES. 


July,  1890 $  798.11  July,  1890 9  21,519.14 

August 847.82  Auj^ust 22,043.34 

Sepleniber 1042.53, September 27,105.99 

October 903.06  October 24,382.65 

November 882.02  November 22,050.62 

December 906.19  December 24,467.15 

January,  1891 642.55  January,  1891 17,349.00 

February 686.18  February 16,468.49 

March 693.40  March 18,028.56 

April 886.49  April 23,048.84 

May 912.09  May  23,714..')5 

June 1,617.15  June 27,84!).:v) 

Average $~901.46!       Total $268,057.72 


PROFITS 

For  the  First  Half  Year— July  to  January. 

Profits  on  sales,  .57th  quarter " $  8,194.79 

I'rotUs  on  sales,  58th  (juarter 10,531.06 

Total $18,725.85 

Interest  on  money  invested $3,513.40 

Clerk  hire,  insurance,  etc.,  57th  quarter 3,6ii3.46 

Clerk  hire,  insurance,  etc.,  58th  quarter 4,786.28 

Total  expenses $12,003.14 

Net  profits $  6,722.71 

Carried  to  surplus 1,(>K0.67 

Net  dividends $  5,042.0^1 


118  HOW   TO   COOPERATE. 

For  the  Second  Half  Year— January  to  July. 

Profits  on  sales,  59tli  quarter %  8,273.81 

Profits  on  sales,  60th  quarter 9,849.07 

Total «18,122.88 

Interest  on  money  Invested $3,746.50 

Clerk  hire,  etc.,  59th  quarter 4,297.86 

Clerk  hire,  insurance,  taxes,  etc.,  60th  quarter 5,159.70 

Total  expenses $13,204.06 

Net  dividends $  4,918.82 

DIVIDENDS  PAID  TO  PURCHASERS. 

Noof  quarter 57th.       58th.       59th.       60tli. 

To  shareliolders,  per  cent 8.2  9.0  11.0  9J 

To  non-members,  per  cent 4.1  4.5  5.5  4§ 

How  the  Farmers  Have  Prospered. — We  regret 
not  having  been  able  to  visit  this  institution,  but  Edwin 
Snyder,  in  a  paper  before  the  Kansas  Board  of  Agricul- 
ture, speaks  of  its  effect  upon  the  members  as  follows : 

"In  my  travels  among  the  farmers  I  have  not  met  a 
community  where  there  was  so  much  evidence  of  thrift, 
intelligence  and  enterprise,  as  among  the  members  of 
the  Johnson  County  Cooperative  Association.  The  hab- 
its of  thrift,  economy,  foresight  and  calculation,  which 
the  successful  conduct  of  a  cooperative  store  involves 
and  requires,  cannot  fail  to  be  of  signal  advantage  to  its 
members.  If  this  association  has  $150,000,  which  it 
jointly  owns,  doubtless  the  members  have  individually, 
outside  the  company,  more  property  than  they  would 
have  had  in  the  absence  of  this  enterprise.  This  single 
concern  has  increased  the  wealth  of  the  State  $150,000, 
and  at  the  same  time  assigned  this  wealth  to  a  worthy 
and  deserving  class  of  people." 

A  recent  visitor  remarks  :  *'I  confess  that  I  was  sur- 
prised at  the  amount  of  business  done  by  this  institution. 
Never,  in  any  other  town  of  3,500  inhabitants,  have  I 
witnessed  so  complete  a  system  of  trade.  Everything 
was  in  perfect  order,  and  everybody,  from  clerk  to  man- 
ager, was  busily  employed,  and  the  constant  click  and 
whirr  of  the  cash  carriers  was  convincing  proof,  even 


OTHER  SUCCESSFUL  STOBES. 


120  HOW  TO  C06p£RATE. 

though  one  was  blind  and  could  not  see  the  throng  of 
customers,  that  an  enormous  amount  of  business  was 
being  transacted.  Most  of  the  employes  are  farmers' 
sons  and  daughters,  who  were  taken  from  the  farm  and 
given  employment  as  the  business  of  the  association 
increased  or  demanded  extra  help.  That  this  coopera- 
tive enterprise  is  a  credit  to  the  energy  and  intelligence 
of  the  members  of  the  grange  in  Johnson  county,  no 
one  who  visits  it  can  for  a  moment  doubt.  These  700 
grangers  are  to-day  worth  $150,000  more  than  they 
would  have  been  had  they  never  undertaken  this  coope- 
rative work.  Yet  by  it  no  one  has  been  wronged  in  the 
least,  just  as  many  people  have  been  given  employment, 
and  the  profits  of  trade  have  been  fairly  divided  among 
those  who  made  it." 

The  Manager's  Advice — Mr.  H.  C.  Livermore,  the 
manager,  is  a  clear-headed,  thorough  man  of  business. 
Aside  from  the  best  business  management,  which  it  is 
evident  has  prevailed,  Mr.  Livermore  attributes  success 
first,  to  the  willingness  on  the  part  of  the  shareholders 
to  work  for  the  best  interests  of  the  association  rather 
than  for  their  personal  advancement ;  second,  the  doing 
of  business  for  cash, — doing  a  small  business  on  this 
basis  rather  than  a  large  trade  on  credit ;  third,  the 
accumulation  of  a  large  reserve  fund  to  guard  against 
losses  and  keep  the  stock  at  its  par  value.  He  also  ad- 
vocates an  inventory  at  least  once  in  six  months,  but  in 
his  own  business  makes  quarterly  accountings. 

Mr.  Livermore  further  suggests  that  sixty  shareholders 
are  enough  to  start  with.  They  should  be  men  who  will 
work  for  the  general  good  of  the  society, — not  political 
tricksters  with  axes  to  grind,  not  dishonest  men,  not 
men  who  do  not  get  along  peaceably  with  their  neigh- 
bors, or  who  have  a  disposition  to  rule  or  ruin.  He 
also  warns  against  shareholders  *'who  think  they  know 
it  all  and  only  know  but  little,  who  will  not  peaceably 


OTHEB  BUOOESSPUL  8T0EES.  131 

abide  by  the  will  of  the  majority,  who  will  not  trade 
with  the  society  and  encourage  others  to  trade  with  it." 

THE  TEXAS   COOPEEATIVE    ASSOCIATIOST, 

This  Conspicuously  Successful  Society  confines 
its  membership  and  benefits  wholly  to  Patrons  of  Hus- 
bandry. It  was  chartered  July  5,  1878,  with  an  author- 
ized capital  of  $100,000,  of  which  only  1250  was  paid  in. 
Its  by-laws  appear  in  the  Appendix,  from  which  it  will 
be  noted  that  subordinate  granges  or  individual  mem- 
bers of  the  order  can  hold  shares.  According  to  the 
12th  annual  report,  the  concern  had  a  capital  stock  of 
$80,945  on  June  30,  1890.  Of  this  amount  $39,325  was 
held  by  478  individuals,  $39,140  by  129  local  cooperative 
associations,  and  $2,480  by  102  subordinate  or  local 
granges,  making  709  shareholders  in  all.  The  whole 
business  is  thus  owned  and  operated  by  the  farmers. 
Only  about  $12,000  of  the  present  capital  stock  repre- 
sents new  cash  actually  paid  in.  The  rest  was  earned  in 
the  business  and  stock  issued  for  it  in  place  of  dividends. 
In  addition  to  this  accumulated  capital  from  earnings, 
the  association  has  paid  back  to  the  farmers  over  $200,- 
000  in  dividends  on  purchases  and  interest  on  capital. 
The  T.  C.  A.  has  also  sold  goods  much  cheaper  than 
other  merchants,  so  much  so  that  at  first  it  had  the 
whole  commercial  world  to  fight  with  their  organized 
system.  The  society  occupies  the  handsome  warehouse 
at  Galveston  illustrated  in  Fig.  13,  and  has  an  agency 
in  New  York  city.  The  by-laws  provide  that  in  divid- 
ing the  profits  shareholders  shall  be  paid  ten  per  cent 
interest  on  paid-up  stock ;  a  portion  of  the  earnings 
may  be  set  aside  to  increase  the  capital,  and  the  remain- 
der is  divided  among  shareholders  and  Patrons  of  Hus- 
bandry not  shareholders,  the  former  receiving  full  and 
the  latter  half  dividends.  The  profits  derived  from  the 
business  of  Patrons  not  sliareholders,  and  by  those  who 


122 


HOW   TO   OOOPEEATE. 


are  not  members  of  the  grange,  are  styled  an  accumu- 
lative fund,  which  is  divided  yearly  among  the  share- 
holders in  the  shape  of  new  stock.  About  one-twentieth 
of  the  total  business  is  of  this  kind. 

Progress  and  Profits.  —President  A.  J.  Kose  states 
that  this  accumulative  profit  has  for  twelve  years  aver- 
aged six  per  cent  on  the  capital.  The  trade  profit  or 
dividend  has  ranged  from  one  and  one-fourth  to  four 
and  one-half  per  cent.  It  would  have  been  much  larger 
had  the  association  maintained  the  usual  prices.  Ten 
per  cent  interest  has  also  been  paid  on  capital.  *'In 
addition  to  these  immediate  financial  benefits,  many  a 
seventy-cent  boy  has  received  in  the  central  or  local 
stores  a  good  practical  business  education  that  enables 
him  to  get  11,000  to  $1,500  salary,  and  tliousands  of 
Patrons  have  learned  business  methods  and  business 
habits  that  they  would  not  part  with."  The  share  capi- 
tal is  withdrawn  only  after  it  has  been  invested  at  least 
five  years,  according  to  a  vote  taken  in  1886.  Since 
that  date  the  capital  has  nearly  doubled,  showing  that 
the  non-withdrawal  feature  is  a  popular  one.  The  net 
increase  in  capital,  the  fund  available  for  dividends 
on  purchases,  and  the  number  of  shareholders  thus 
compare  : 


Tear. 

Paid  Capital. 

Dividend  Fund. 

Shareholders. 

1879 

9     250 

1880 

1,180 

9  1,385 

1881 

3,348 

8,632 

1882 

14,000 

12,655 

1883 

20,000 

20,542 

1884 

27,500 

17,349 

1885 

32,670 

11,644 

473 

1886 

39,730 

19,694 

497 

1887 

51,715 

19,861 

620 

1890 

80,945 

14,798 

709 

How  the  Business  is  Done. — Besides  the  savings 
on  goods  sold,  the  T.  C.  A.  has  been  a  great  boon  to 
Texas  farmers  in  that  it  has  handled  their  cotton  for  a 
commission  of  twenty-five  cents  per  bale,  instead  of  the 


OTHER   SUt!CESSFUL   STORES. 


123 


one  dollar  and  a  quarter  which  was  the  brokers'  regular 
charge.  Out  of  this  reduced  commission  the  association 
returns  ten  to  fifteen  cents  per  bale  as  a  dividend  or 
rebate  on  cotton  handled  for  its  members.  The  annual 
statement  shows  that  credit  enters  largely  into  the  busi- 
ness, though  an  iron-clad  rule  adopted  at  the  twelfth 
annual  meeting  compels  all  sales  to  be  settled  for  within 
thirty  or  ninety  days  according  to  custom.  The  follow- 
ing comparison  of  the  annual  statements  for  the  years 
ended  Jan.  30,  1887,  and  1890,  are  of  interest  and  value. 
It  reveals  a  growing  tendency  to  credit  that  must  be 
corrected,  or  it  will  cause  trouble.  Strenuous  efforts 
are  being  made  to  correct  this  weakness. 

COMPARATIVE     STATEMENT     TEXAS    COOPEEATIVE    ASSO- 
CIATION". 


Assets. 


1890. 


1887. 


LiaMUties. 
1890.~ 


Cash $  5,074.67  $  2,868.40  Capital  stock ....  f  81 ,005.00 

BUI  receivable...   63,495.03     29,847.38  Bills  payable. .. .   64,641.07 
Aocotiiits  due  ...   50,224.64|    35,292.65  Acc'ts  payable. . .    31,679.28 

Mercliandise 85,692.36    51,242.38:  Div'nd  undrawn     2,447.48 

Real  estate 2,178^15] |i Reserve  funds...    4,374.88 

Total $206,664.45  119,250.81 !  ^^^  Ins.  debt. . . .     7,719.46 

*  Net  profits 14,797.68 

Total 206,664.45   119,280.81 


1870. 


$51,715.00 

5,000.00 

39,742.20 

2,572.06 

1,907.49 
20,221.55 


Receipts.                       | 

Expenditures. 

1890. 

1887. 

$29,559.34 

4,8,')8.10 

729.49| 

1,561.43 

1,154.63 

1890. 

1387. 

Profits  on  Mer.  ..$30,773.38 
Com.  on  cotton . .     2,102.10 

Gen'r'l  expenses  $14,828.37 
I>ecturing  exp. . .      1,427.50 
Profit  and  loss  . .      1.821.93 
Bal.  net  profit. . .    14,797.68 

$17,641.44 

20,221.55 

Total 32,876.48'    37,862.99 

Total 32,875.48 

37,862.99 

General  Remarks. — Each  of  the  one  hundred  and 
twenty-nine  local  cooperative  stores  or  societies  con- 
nected with  the  state  association  does  its  own  local  busi- 
ness and  reaps  its  own  profits.  Many  of  these,  however, 
have  not  been  very  successful,  and  the  number  has,  dwin- 
dled of  late  years,  owing  to  the  credit  system.  While 
the  T.  C.  A.'s  sales  amount  to  over  $300,000  a  year,  the 


124 


HOW  TO  COdPERATB. 


total  sales  of  the  local  "  Coops  "  are  probably  five  times  as 
much.  Each  local  society  is  represented  at  the  annual 
meeting  of  the  T.  0.  A.,  at  which  the  officers  and  seven 
out  of  thirteen  directors  are  chosen.  The  directors  elect 
the  business  manager,  who  receives  a  salary  of  1250  a 
month,  and  gives  a  bond  of  $50,000.     The  secretary  and 


Fig.  13.    Stokes  and  Warehouse  of  the  Texas  Association. 


treasurer  are  also  under  bonds.  J.  S.  Rogers,  the  man- 
ager, has  always  been  manager,  and  has  always  counseled 
sound  cooperative  principles  in  contradistinction  to  some 
of  the  grander  but,  as  events  proved,  more  chimerical 
schemes  of  the  Texas  Farmers'  Alliance.  The  T.  C.  A. 
also  operates  a  mutual  fire  insurance  company,  the  bene- 
fits of  which  are  confined  to  Patrons.  Started  Sept.  15, 
1885,  with  no  capital,  the  insurance  department  had  a 


OTHER  SUCCESSFUL   STORES.  125 

cash  balance  of  nearly  $8,000  on  hand  June  30,  1890, 
after  paying  losses  and  expenses  to  the  amount  of  $3,855. 
Just  How  to  Start  a  Cooperative  Store. — One  or 
two  progressive  men  and  women  should  first  read  up  on 
the  subject  until  they  master  it  fully.  Then  get  others 
to  read  this  book.  Discuss  the  subject  at  several  meet- 
ings, at  which  special  efforts  should  .be  made  to  secure 
the  attendance  of  the  women  as  well  as  the  men.  If  the 
women  are  interested  and  satisfied  with  the  cooperative 
store,  its  success  will  be  insured.  Make  no  unnecessary 
noise  about  it,  but  when  a  reasonable  number — say  from 
a  dozen  to  a  hundred — of  clear-headed  people  are  thor- 
oughly interested,  go  ahead,  and  circulate  a  subscription 
paper  drawn  up  something  like  this : 

We,  the  undersigned,  hereby  subscribe  for  the  number  of  shares  of 

the Cooperative  Association  set  against  our  respective  names,  the 

shares  to  be  Five  Dollars  each,  payment  to  be  made  as  follows:  [Here 
specify  how  many  shares  shall  be  paid  up  in  full  and  the  terms  of  pay- 
ment for  the  remainder— as,  for  instance,  one  dollar  per  month— or 
whatever  plan  will  best  suit  the  members  and  insure  enough  capital  to 

make  a  safe  beginning.]    Our  subscriptions  are  to  be  void  unless 

shares,  to  the  amount  of  at  least paid  up  capital  are  subscribed 

for.  Said  association  to  be  legally  incorporated  under  the  State  law 
and  to  be  governed  by  by-laws  in  harmony  with  those  adopted  by  other 
successful  cooperative  entei-prises  on  the  Rochdale  system. 

An  energetic  committee  should  be  appointed  to  circu- 
late this  pledge — men  in  whom  the  local  public  have 
confidence.  The  necessary  subscriptions  secured,  the 
subscribers  or  shareholders  should  meet  and  perfect  a 
cooperative  corporation  under  the  State  law.  The 
assistance  of  a  lawyer  is  usually  necessary  to  start  right 
and  comply  with  the  law.  The  canvassing  committee 
for  pledges  should  be  limited  in  its  work  to  a  certain 
number  of  days ;  also  the  committee  on  by-laws  should 
be  limited  to  a  few  days.  This  is  necessary  to  push  the 
thing  right  along  and  inspire  confidence.  Let  the  sub- 
ject be  agitated  and  discussed  until  the  people  are  thor- 
oughly interested,  but  when   the   start  is   made,  push 


126  HOW  TO   COOPERATE. 

things.  Take  advantage  of  all  the  experience  of  the  suc- 
cessful and  unsuccessful  cooperative  efforts  outlined  in 
this  book.  Select  the  very  best  men  for  officers  and 
back  them  up.  Above  all,  remember  that  an  humble 
beginning  on  a  safe  basis  is  better  and  surer  to  grow  into 
a  magnificent  success  than  a  more  "brilliant"  start  on 
a  larger  scale  but  looser  system. 

A  Useful  Hint. — We  may  add  here  that  one  great 
secret  of  the  success  of  the  Arlington  association  is  the 
effort  made  to  keep  its  members  constantly  interested. 
Thus  for  days  before  the  last  Fourth  of  July  the  entire 
working  force  and  many  of  the  members  put  in  their 
spare  time  in  arranging  for  a  grand  Fourth  of  July 
parade.  The  ''Coop"  appeared  in  the  parade  with  its 
fourteen  teams  all  gayly  painted  and  decorated  with  flags 
and  bunting,  and  loaded  with  goods  from  the  different 
stores,  each  team  decorated  with  proper  signs  and  mottos 
and  driven  by  two  proud  employes.  Its  appearance  in 
the  parade  created  magnificent  enthusiasm,  and  was  a 
tremendous  advertisement.  Even  more  important  was 
the  value  of  such  an  object  lesson  in  inspiring  further 
confidence  on  the  part  of  the  members  of  the  association 
and  the  thousands  upon  thousands  of  working  people 
who  witnessed  the  procession.  It  may  be  added  here 
that  the  association's  quarter,  ended  July  1,  1891,  was 
another  very  successful  one,  the  dividends  on  purchases 
being  eight  per  cent. 


CHAPTER  V. 

COOPERATIVE   PRODUCTION. 

Not  a  Simple  Thing. — This  is  a  far  more  compli- 
cated matter  than  cooperative  distribution.  The  theory 
is  that  in  time  tlie  savings  of  the  latter  system  should 
be  sufficient  to  establish  enough  cooperative  manufacto- 
ries, etc.,  to  produce  the  goods  required  for  distribution. 
In  practice  it  may  be  many  years  before  we  in  America 
reach  this  stage.  For  this  reason,  and  because  our  peo- 
ple will  do  well  to  first  master  cooperative  distribution, 
detailed  information  is  here  given  only  upon  several 
phases  of  cooperative  production  that  have  already 
proven  successful.  Even  among  English  cooperators, 
productive  effort  is  largely  confined  to  the  Wholesale 
society. 

The  Rochdale  idea  of  feeding  the  business  on  its 
profits  must  be  observed  even  more  faithfully  in  coopera- 
tive production  than  in  distribution.  The  entire  profits 
should  not  be  declared  in  dividends  on  the  material  or 
labor  used  in  the  manufactures.  A  liberal  allowance 
for  depreciation  must  be  made,  and  a  reserve  fund  cre- 
ated for  the  contingencies  that  are  so  liable  to  affect  any 
manufacturing  enterprise. 

Cooperative  Farming. — Cooperative  cheese  facto- 
ries and  creameries  for  the  manufacture  of  butter  arc  an 
established  success.  A  special  chapter  is  devoted  to 
them.  It  is  evident  also  that  if  farmers  are  to  get  the 
utmost  out  of  the  business  of  producing  sugar  from 
beets  or  sorghum  they  should  own  and  manage  the 
factories  cooperatively.     Then,  after  paying  a  reasonable 

127 


128  HOW  TO   COOPERATE. 

hire  to  capital,  the  balance  of  the  profits  can  be  declared 
in  dividends  on  beets  or  cane  furnished.  Germany  has 
113  cooperative  beet  sugar  factories,  with  an  average 
capital  of  $200,000 ;  they  each  work  up  about  25,000 
tons  of  beets  annually,  the  expenses  being  a  trifle  under 
$3  per  ton  (including  interest  on  capital),  leaving  an 
average  profit  of  $1.25  per  ton  above  the  usual  price 
paid  for  beets.  This  manufacturers'  profit  of  $1.25  per 
ton  is  by  the  cooperative  plan  paid  in  dividends  on  beets, 
instead  of  going  into  the  pockets  of  a  factory  proprietor. 
In  view  of  the  prospective  development  of  the  sugar 
industry  in  America,  the  application  to  it  of  cooperation 
should  be  kept  in  view.  The  amount  of  capital  required 
need  be  no  hindrance  to  cooperative  effort  when  the 
established  character  of  the  industry  is  proven. 

It  would  be  a  comparatively  easy  matter  for  new  set- 
tlers in  the  West  and  South  to  unite  so  as  to  get  the  full 
benefits  of  cooperation.  Let  them  homestead  a  town- 
ship, and  own  in  common  an  artesian  well  to  supply 
water  for  irrigation  and  other  purposes,  thoroughbred 
bulls  and  stallions  to  improve  their  stock,  a  steam  plow, 
threshing  machine,  an  exchange  or  store  for  supplying 
groceries  and  selling  produce,  an  elevator  for  storing 
grain,  a  factory  for  butter-  and  cheese-making  with  re- 
frigerator house  attached,  a  general  repaii-  shop,  a  laun- 
dry, a  savings  bank  and  building  association,  and  other 
things  required  for  their  work  and  business.  The  plan 
is  perfectly  practical,  but  the  trouble  is  that  in  carrying 
it  out  some  crank  or  enthusiast  would  try  to  include 
household  life  in  common.  Without  this  feature,  how- 
ever, the  social  life  of  such  a  settlement  would  be  bright 
and  attractive,  and  would  do  much  to  rob  farming  of 
the  lonesomeness  that  is  distasteful  to  many.  After 
complying  with  the  homestead  laws,  the  people  could 
live  in  clusters  of  houses  or  little  vilhiges,  that  would 
make  the  social  side  of  life  on  the  farm  still  more  allur- 


COOPERATIVE    PRODUCTION. 


1-^9 


K        I 


130  HOW   TO   COOPERATE. 

ing.  A  few  such  cooperative  townships  could  unite  to 
build  and  operate  flour  mills  or  beef  and  pork  packing 
houses,  and  other  enterprises  that  require  more  capital 
and  product  than  might  be  furnished  by  one  small 
township. 

Some  Nebraska  farmers  are  now  forming  such  a  set- 
tlement, and  estimate  that  through  this  system  they 
can  get  twenty-five  instead  of  fifteen  cents  for  butter, 
fifteen  instead  of  ten  cents  for  eggs,  seventy  instead  of 
fifty  cents  for  wheat,  five  instead  of  three  and  one-half 
cents  per  pound  for  live  hogs,  with  similar  savings  in 
beef  and  other  produce.  They  estimate  that  in  each 
county  twenty-four  miles  square  of  average  productive- 
ness in  Nebraska,  the  farmers  can  save  over  $500,000 
per  year.  Tliis  may  be  a  wild  calculation,  but  with 
proper  management,  no  reader  is  too  blind  to  see  the 
great  savings  that  could  be  effected.  Because  the  profits 
of  such  distribution  and  manufacture  go  to  middlemen 
is  why  farmers,  especially  the  growers  of  staple  crops  in 
the  West,  are  not  better  off. 

In  most  farming  industries,  however,  little  progress 
has  been  made  cooperatively.  But  it  is  becoming  more 
and  more  common  for  farmers  who  wish  to  improve 
their  stock  to  unite  in  a  corporation  for  the  purpose  of 
buying  pure  blooded  sires  and  accounting  for  their  use 
in  a  business-like  way — a  thorouglily  commendable  prac- 
tice, whereby  even  the  poorest  farmer  may  improve  his 
stock.  In  other  farming  industries,  little  progress  has 
been  made  in  cooperative  production.  The  farmer  is 
beginning  to  realize,  however,  that  in  many  other  direc- 
tions he  can  unite  with  his  neighbors  to  advantage. 
The  old  question  of  dogs  versus  sheep  would  be  effectu- 
ally answered  if  our  Eastern  farmers  would  unite  their 
flocks  and  hire  a  shepherd  to  tend  them.  No  better  use 
can  be  found  for  hill  pastures  and  so-called  deserted 
farms,  and  with  large  enough  flocks  the  shepherd's  ser- 


COOPEBATJVE   PRODUCTION.  131 

vices  will  pay  even  better  than  on  the  ranches  of  the 
West.  The  saving  in  repairs  in  fences  would  alone 
be  enormous. 

Only  by  a  similar  plan  of  pasturing  cattle  in  large 
numbers  can  the  Eastern  farmer  produce  as  cheaply  as 
the  Western  feeder.  The  agricultural  depression  and 
the  railroads  have  quite  leveled  the  value  of  grazing 
lands  in  both  sections,  and  profitable  production  in  any 
part  of  the  country  will  depend  more  and  more  upon 
the  extent  to  which  farmers  cooperate  to  produce  in 
large  quantities  at  the  minimum  of  expense. 

This  is  true  of  staple  crops  as  well  as  of  meat  products 
and  wool,  Nor  do  the  relative  merits  of  intensive  ver- 
sus extensive  farming  prevent  cooperation.  If  the 
grower  of  one  or  two  acres  of  vegetables  gets  great  yields 
and  good  profits,  might  he  not  do  still  better  if  the  ex- 
pense of  cartage,  of  fertilizers,  of  irrigation,  of  every- 
thing except  day  labor,  were  reduced  by  union  with  ad- 
joining market  gardeners  ?  So,  too,  in  working  the  land 
provided  the  society  has  the  required  capital,  brains  and 
experience.  But  elevators,  flouring  and  lumber  mills, 
and  similar  factories  for  working  up  raw  farm  products, 
are  usually  best  conducted  as  cooperative  corporations 
independent  of  the  store.  This  simplifies  the  work,  and 
with  the  average  body  of  cooperators  insures  better  man- 
agement. Such  efforts  should  be  organized  and  operated 
with  the  same  regard  for  business  principles  and  the 
requirements  for  success  noted  elsewhere  for  stores, 
creameries  or  insurance  companies.  The  object  is  to 
convert  the  raw  crop  into  the  finished  product  for  mar- 
ket at  the  least  expense,  selling  the  same  to  the  best 
advantage  and  returning  the  proceeds  to  the  farmers  in 
accordance  with  the  quantity  and  quality  of  the  raw 
material  furnished  by  each. 

Working  Men  Cooperative  Producers — meaning 
the  management  of  ordinary  manufacturing  enterprises 


132 


HOW  TO  COOPERATE. 


by  the  men  who  perform  the  labor.  Here  the  object  is 
to  declare  profits  in  dividend  on  labor  done,  after  paying 
capital  its  hire  and  setting  aside  a  reserve.  The  plan 
has  proven  successful  in  a  few  instances  in  the  United 
States,  and  in  numerous  enterprises  in  England  and 
France,  but  failure  has  been  far  more  frequent  abroad 
in  productive  effort  than  with  cooperative  stores.     The 


Fig.  15.    Interior  View  of  Fig.  14.— Cooperative  Marketing. 

reason  is  plain — it  is  not  the  principle,  but  the  manage- 
ment that  is  at  fault.  The  most  conspicuous  successes 
have  been  where  the  members  cheerfully  recognized  the 
principle  of  paying  each  worker  according  to  his  ability 


COOPEEATIVE  PKODUCTION".  133 

to  contribute  to  the  prosperity  of  the  concern.  In  such 
cases,  the  workers  have  willingly  selected  their  most 
capable  men  as  officers,  and  paid  liberally  for  brains  and 
experience  as  well  as  for  manual  labor.  This  insured 
tlie  best  manager  the  employes  had  among  their  number, 
and  stimulated  each  worker  to  improve  his  efficiency  so 
as  to  get  an  increase  in  wages.  The  profits  being  divided 
in  dividends  on  wages,  the  larger  the  latter  the  more 
profit  accrues  to  the  capable  and  well  paid. 

There  has  been  much  discussion  as  to  division  of 
profits — what  proportion  should  go  to  labor,  capital  and 
consumer,  but  cooperators  who  know  enough  to  so  man- 
age a  factory  as  to  earn  a  profit  will  know  how  to  divide 
the  profits  on  a  fair  basis — to  labor  rather  than  to  capital. 

Furniture  Workers'  Cooperators. — An  instance 
of  a  practical  and  long  continued  success  among  artisans 
is  furnished  by  the  St.  Louis  Furniture  Workers' Asso- 
ciation, organized  under  the  laws  of  Missouri,  Nov.  15, 
1878.  It  now  has  a  cash  capital  of  $50,000,  all  paid  up. 
The  start  was  made  in  a  very  humble  way,  the  mem- 
bers having  comparatively  little  money.  During  the 
first  few  years  fifteen  per  cent  of  the  wages  of  each 
man  was  charged  up  to  his  labor  account  and  placed  to 
his  credit  in  taking  up  shares  of  the  capital  stock.  In 
this  way  each  member  was  encouraged  to  increase  his 
holdings  and  save  money  for  working  capital.  A  divi- 
dend of  five  per  cent  was  declared  in  1884,  but  the  com- 
paii^does  not  make  a  practice  of  paying  cash  dividends, 
but  pays  as  good  wages  as  possible.  There  are  now 
eighty-five  members,  all  of  whom  work  in  the  factory 
and  most  of  whom  own  the  homes  they  occupy.  A  few 
years  ago  the  association  bought  the  premises  it  now 
occupies,  which  it  previously  rented.  Its  sales  last  year 
were  over  1100,000,  and  its  goods  are  shipped  throughout 
the  Southwest.  Each  stockholder  earns  his  wages  the 
same  as  at  a  private  factory.     The  wages  are  credited 


134  HOW  TO  COOPERATE. 

each  week  to  the  separate  accounts,  pay  day  coming 
twice  a  month.  The  full  amount  of  the  wages  earned 
by  each  stockholder  is  paid  if  the  cash  in  the  treasury 
warrants.  Otherwise  such  percentage  of  the  amount 
due  is  paid  to  each  man  as  the  cash  will  permit. 

This  report  indicates  that  these  furniture  workers  are 
not  only  willing  to  be  paid  on  their  merits,  but  if  cash  is 
short  cheerfully  accept  such  proportion  of  their  wages  as 
can  be  paid.  It  should  be  added  that  any  deficiencies  of 
payment  on  one  pay  day  is  made  up  at  a  later  date, 
unless  some  unforseen  loss  occurs.  Thus  the  workers 
share  in  the  losses  or  profits. 

By-Laws  for  Cooperative  Factories  must  vary 
according  to  the  requirements  and  nature  of  the  business. 
The  rules  of  the  St.  Louis  Furniture  Workers'  Associa- 
tion, while  crude  in  some  respects,  contain  so  many 
points  instructive  to  workingmen  cooperators  that  we 
here  insert  them : 

Abticle  I.    Meetings  of  the  Stockholders. 

Section  1.  The  stockholders  shaU  hold  two  meetings  a  year— on  the 
third  Tuesday  in  January  and  July. 

Sec.  2.  At  the  January  meeting  the  directors  shall  give  the  stock- 
holders a  complete  report  of  the  condition  of  the  association,  an  inven- 
tory of  the  property,  the  state  of  the  finances,  and  all  that  has  refer- 
ence to  the  management. 

Sec.  3.  At  the  July  meeting,  the  main  feature  shall  be  a  discussion 
of  the  business  of  the  association,  without  a  report  from  the  directors 
unless  they  wish. 

Article  II.    Meetings. 

Section  1.  In  ail  the  meetings  of  the  stockholders  fifty  shall  be  a 
quorum.  When  this  number  is  present  the  president  shall  call  the 
meeting  to  order.  In  the  absence  of  the  president  the  secretary  sliall 
call  the  meeting  to  order;  they  shall  then  vote  for  a  chairman. 

Sec.  2.  The  directors  can  call  special  meetings  of  the  stockholders 
when  a  majority  thinks  necessary.  On  a  written  request  from  one- 
quarter  of  all  the  stockholilers,  the  president  shall  call  a  meeting. 
Ten  days'  notice  of  all  meetings  of  the  stockholders  shall  be  given,  and 
this  shall  be  published  in  tlie  largest  circulated  Oerman  and  English 
daily  papers  in  St.  Louis  ten  days  beforehand.  Also  the  same  notice 
shall  be  sent  to  every  stockholder  through  the  mail. 

Sec.  3.  In  all  meetings  the  majority  rules,  except  in  removing  offi- 
cers and  changing  by-laws  and  rules,  when  a  two-thirds  majority  is 
necessary. 


COOPERATIVE   PEODUCTION.  135 


Sec.  4.  In  all  meetings  of  the  stockholders,  each  stockholder  has  one 
vote,  except  in  the  election  of  directors,  when  each  share  represents 
one  vote. 

Article  III.    The  Election  of  Directors. 

Section  1.  The  annual  election  of  directors  shall  be  held  on  the  first 
Wednesday  after  the  third  Tuesday  in  January. 

Sec.  2.  All  stockholders  under  eighteen  can  vote  only  through  a 
guardian. 

Sec.  3.  The  directors  choose  their  own  officers.  If  the  place  of  a 
director  becomes  vacant,  then  shall  the  next  highest  candidate  in  the 
last  election  take  his  place. 

Sec.  4.    All  directors  serve  a  term  of  one  year. 

Sec.  5.  Paragraph  4  of  our  charter  shall  hereafter  read,  "  The  number 
of  directors  shall  be  thirteen."  The  president,  secretary  and  treasurer 
shall  constitute  the  executive  board  and  transact  the  main  business 
under  the  oversight  of  the  rest  of  the  directors. 

Article  IV.    Duties  of  the  Officers. 

Sec.  1.  The  Directors  shall  hold  a  meeting  once  a  month  and  the  sec- 
retary shall  notify  every  director  of  the  same. 

Sec.  2.  Should  the  office  of  superintendent  become  vacant,  then  the 
directors  have  power  to  appoint  or  discharge  his  successor  by  a  two. 
thirds  vote. 

Sec.  3.  Eight  days  before  inventory  the  stockholders  who  work  In 
the  factory  shall  appoint  nine  men  to  take  the  inventory.  Of  these 
four  shall  be  stockholders  outside  the  factory  and  five  employes  in 
the  factory. 

Sec.  4.  Tlie  directors  shall  keep  back  ten  per  cent  of  the  wages  ol 
the  stockholders  working  in  the  factory  who  do  not  own  twenty  shares, 
This  fund  is  to  be  used  in  purchasing  shares  of  stockholders  not  in  the 
factory.  The  purcliase  goes  by  rotation  in  the  order  of  the  first-bought 
share. 

Sec.  5.  Tlie  directors  shall  pay  the  workmen  on  the  2d  and  16th  day 
of  each  montli.    No  money  is  to  be  paid  out  for  wages  at  any  otlier  time. 

Sec.  6.  The  President  shall  perform  all  the  duties  laid  upon  liim  by 
the  rules  of  the  association.  He  shall  have  general  oversight  of  the 
business  of  the  association  with  the  assistance  of  the  secretary  and 
treasurer,  subject  to  the  control  of  the  other  directors.  The  president 
has  to  sign  all  note«  and  drafts.  He  has  also  the  right  to  call  special 
meetings  of  directors  and  stockliolders  when  he  thinks  best.  He  sliall 
not  pay  out  more  than  $6,000  In  one  month,  nor  sign  notes  or  do  other 
financial  transactions  unless  with  the  sanction  of  the  directors. 

Sec.  7.  Tlie  Secretary  shall  keep  correct  minutes  of  each  meeting  of 
tlie  directors  in  a  book  for  that  purpose,  each  record  to  be  signed  by 
the  president  and  himself.  He  shall  also  send  all  notices  for  meetings 
of  the  directors  and  stockholders  to  each  member.  He  has  the  care  of 
all  the  books  and  papers  of  the  association.  The  books  shall  at  any 
time  be  open  for  the  inspection  of  a  committee  of  members  or  directors. 

Sec.  8.  The  Treasurer  nhfiW  give  a  bond  for  a  sum  to  be  set  by  the 
stockholders,  but  not  less  than  85,000.  He  has  cliarge  of  all  tlie  nioiieys 
received  by  the  association  and  has  to  pay  all  bills  less  than  $500,  which 


136  HOW  TO  COOPERAlfi. 


must  be  approved  by  the  president  and  secretary.  He  must  keep  a 
correct  account  of  all  the  transactions  in  a  book,  and  his  books  must 
be  open  at  any  time  for  the  inspection  of  the  directors. 

Sec.  9.  The  president  and  treasurer  shall  receive  five  dollars  a  year 
and  the  secretary  fifty  dollars  for  their  official  services. 

Sec.  10.  All  directors  who  work  by  the  piece  shall  be  paid  twenty- 
five  cents  per  hour  for  loss  of  time  occasioned  by  attending  meetings 
and  other  business  pertaining  to  the  association. 

Sec.  11.  These  by-laws  can  be  amended  or  changed  at  any  of  the 
meetings  according  to  Art.  2,  Sec.  4. 

Factory  Rules. 

1.  The  superintendent  of  the  factory  has  charge  of  the  inside  and 
outside  business  of  the  association.    He  also  has  to  give  the  cost  to 


'•Sff'UrJtm-MfjarairM'Mrm.  vjarjm-trjmrjmrM^jrj^Jrjir*r/>*j^4^jmmmu^^it'itaKrjm3mimJlirMrjmj 


StaU  of  ilowa,       ^»o.  ^  | 


^Lgnns  Cn-Dperative  Assnciatinn.^ 


SbU  U  to  0rrtif3, 3Ko;t.._ __ «.  vwwxui 

to  ^«(,  >«vwa  »v  tu  ^djyUoX  \)w3»  «v  tu  Lyons  Co^)pentiTt  Anociation, 

I    O  - iM\  «^ _ — v6 


Fig.  16.    FuBH  FOB  Shareholders'  Certificate  of  capital  Stock 
IN  A  Cooperative  Association. 

produce  each  piece  of  work  at  the  factory  and  report  the  same  to  the 
directors. 

2.  He  shall  also  see  that  every  workman  does  his  duty  and  that  the 
workmen  have  their  material  for  working  at  the  right  time  at  their 
bench. 

3.  Each  employe  has  all  the  rules  and  orders  from  the  superintend- 
ent, must  obey  him  and  finish  all  work  according  to  direction.  No 
workman  is  permitted  to  take  away  any  of  the  company's  material 
without  permission  of  the  directors.  Every  workman  shall  clean  up 
and  take  to  a  place  for  that  purpose  all  pieces,  shavings,  etc.,  every 
evening  after  work.  Each  machinist  has  to  clean  up  every  Saturday 
evening  his  machine  before  he  leaves  it. 


COOPERATIVE   PRODUCTIOIT.  137 

4.  The  time  to  commence  and  to  stop  work  mornings,  noons  and 
evenings  will  be  given  by  the  bell,  each  workman  strictly  to  obey  it. 
The  ten  minutes  after  9.30  a.  m.  and  five  minutes  after  3.30  p.  m.  will 
be  used  for  luncheon.  During  this  time  the  machines  will  be  stopped. 
Outside  of  this  time  each  workman  must  strictly  attend  to  his  work. 
No  one  is  allowed  to  use  alcoholic  drinks  or  to  smoke  on  the  premises. 

5.  The  ten  minutes'  morning  and  five  miimtes'  afternoon  lunch  time 
must  be  made  up. 

6.  If  a  workman  has  any  complaint  against  another  workman  or 
against  a  foreman,  he  must  go  to  the  superintendent.  If  he  has  com- 
plaint against  the  superintendent,  he  must  subna*t  it  in  writing  to  the 
directors. 

7.  To  insure  a  thorough  and  constitutional  election,  each  shareholder 
working  in  the  factory  shall  on  the  day  before  the  election  appoint 
election  judges. 

8.  Tlie  superintendent  has  no  right  to  discharge  any  shareholder 
who  works  in  the  factory  on  his  own  responsibility,  but  when  he  finds 
it  to  be  necessary,  he  must  bring  it  before  the  directors  for  them  to 
decide. 

9.  No  person  is  allowed  to  enter  the  factory  unless  he  has  a  permit 
from  the  office. 

10.  With  the  exception  of  very  necessary  work,  no  one  shall  be 
allowed  to  work  Simdays. 

Productive  Failures. — It  would  be  easy  to  prepare  a 
long  list  of  so-called  failures  of  cooperative  effort.  Some 
of  them  are  described  in  the  History  of  Cooperation  in 
the  United  States.  Others  are  familiar  to  the  general 
reader.  But  it  is  almost  an  invariable  rule  that  these 
failures  were  due  to  the  methods  employed  and  not  to 
any  weakness  of  the  principle  of  cooperation.  Thus  the 
coal  operatives  at  Summit,  Mo.,  who  had  become  chronic 
strikers,  organized  a  cooperative  company  in  the  latter 
part  of  July,  1885,  associating  with  them  Thomas  War- 
dell,  their  previous  employer.  At  the  end  of  the  year 
"  the  members  saw  by  their  own  settlement  that  they 
were  not  as  well  off  as  by  the  old  order  of  things,  with- 
out the  trouble  of  looking  after  the  business,  so  they 
threw  it  up."  These  same  men,  two  years  after,  went 
on  another  strike,  and  Mr.  Wardell  was  killed  during 
the  contest.  It  is  quite  true  that  "such  unreliable  men 
are  not  likely  to  make  business  a  success  under  any  con- 
ditions." The  Cooperative  Coal  Company  at  Bloom- 
ington,  111.,  made  a  manful  struggle,  but  finally  had  to 


188  HOW  TO  COOPERATE. 

succumb  through  outside  competition.  The  Coopera- 
tive Sash  and  Blind  Factory  at  Rushville,  Ind.,  for 
which  great  hopes  were  made,  assigned  through  mis- 
management. 

Profit  Sharing  is  the  most  successful  form  of  coop- 
eration in  manufacturing  and  productive  enterprises. 
In  this  system  tjie  owners  of  the  plant  or  the  employers 
set  aside  a  certain  proportion  of  the  net  earnings  to  be 
paid  as  a  bonus  or  dividend  on  each  employe's  wages. 
This  leads  the  worker  to  be  more  careful,  for  the  less  he 
wastes  and  the  more  he  does  to  increase  the  concern's 
profits  the  greater  will  be  the  dividend  on  his  wages. 
Dr.  Oilman's  book  on  this  topic  is  particularly  rec- 
ommended. 

Other  Productive  Enterprises  are  mentioned  in 
the  Appendix.  Another  phase  of  very  successful  coop- 
erative production  is  given  in  the  following  chapter  on 
associated  dairying.  From  Prof.  Bemis's  estimates  in 
188G,  it  is  probable  that  cooperative  production  in  New 
England  amounts  to  over  $1,000,000  a  year.  The  most 
brilliant  success  in  cooperative  production  in  the  United 
States  is  afforded  by  the  cooperative  coopers  of  Minne- 
apolis, who  control  a  large  portion  of  the  cooperage  busi- 
ness of  the  Northwest.  There  are  several  cooperative 
cooper  shops,  whose  credit  is  high,  business  profitable, 
and  members  prosperous.  These  cooperators  are  very 
confident  that  in  a  large  range  of  productive  industries 
wage-workers  could  cooperate  with  equal  success.  The 
Cooperative  Barrel  Manufacturing  Company  was  the 
first  enterprise  of  the  kind,  established  in  1874,  and  has 
been  the  model  for  several  similar  attempts,  all  of  which 
have  been  successful.  The  by-laws  have  been  altered 
but  little  since  they  were  drawn  eighteen  years  ago. 
They  are  herewith  printed  entire,  and  give  a  very  clear 
insight  into  the  methods  of  these  successful  cooperators  : 


COOPKKATIVE    PRODUCTION. 


139 


A-BTicLE  I.    Officers. 

Section  1.  The  officers  of  this  association  shall  be  President,  Secre- 
tary, Treasurer,  three  Directors,  and  Foreman. 

Sec.  2.  President.  It  shall  be  the  duty  of  the  president  to  preside  at 
all  meetings  of  the  members,  and  of  the  board  of  managers,  to  preserve 
order  at  such  meetings,  to  decide  all  questions  of  order  subject  to  an 
appeal  to  the  house,  to  put  all  questions  to  vote,  and  give  the  casting 
vote  in  case  of  a  tie.  In  the  absence  of  the  president  at  any  such 
meeting  the  senior  member  present  of  the  directors  shall  act  in  his 


Fig.  15. 


Eneas  Cash,  Secretary  ok  the  Lyons  Cooperative  As- 
sociation.   (See  Page  89.) 


stead.  It  shall  also  be  the  duty  of  the  presiflent  to  sign  all  contracts 
entered  Into  by  this  association,  and  all  certificates  of  stock  issued  by 
It,  to  order  the  payment  of  all  bids  and  claims  against  the  company 
before  the  same  shall  be  paid  by  the  treasurer,  and  shall  keep  a  letter- 
press copy  of  all  communications  emanating  from  this  association,  in 
a  iKjok  provided  for  the  pur]>ose. 

Sec.  3.  Secretary.  It  sliall  be  the  duty  of  the  secretary  to  attend  all 
meetings  of  the  association,  and  make  ac(!urate  minutes  of  all  pro- 
ceedings thereof,  and  record  the  same  in  a  book  provided  for  the 


140  flow  TO  COOPERATE. 


purpose,  and  perform  such  other  duties  as  usually  appertain  to  this 
oCBce.  He  shall  keep  an  accurate  account  of  all  receipts  and  disburse- 
ments of  the  company,  and  a  record  of  the  amount  of  work  done  by 
each  member,  and  tlie  amount  of  money  received  for  said  work,  and 
shall  receive  from  the  foreman  aud  record  a  weekly  statement  of  the 
amount  and  price  of  all  work  sold  during  each  week.  He  shall  make 
up  the  monthly,  semi-annual  and  annual  reports  of  the  receipts  and 
disbursements  of  the  corporation.  He  shall  keep  a  file  of  all  bills, 
contracts  and  other  papers  belonging  to  the  company.  He  shall  coun- 
tersign all  contracts  made,  and  all  certificates  of  stock  issued  by  the 
company.  His  books  shall  be  kept  open  at  all  times  for  the  inspec- 
tion of  any  member  of  the  association,  and  shall,  together  with  all 
receipts,  papere,  etc.,  of  the  association,  be  delivered  by  him  to  his 
successor  at  the  expiration  of  his  term  of  office. 

Sec.  4.  Treasurer.  It  shall  be  the  duty  of  the  treasurer  to  collect  all 
moneys  due  the  association,  and  to  deposit  the  same,  in  the  name  of 
the  association,  in  such  bank  or  banks  as  it  may  from  time  to  time 
direct.  He  shall  pay  out  no  moneys  of  the  association  without  an 
order  by  the  president. 

Sec.  5.  Board  of  Managers.  The  board  of  managers  shall  consist  of 
the  president,  treasurer,  and  three  directors,  who  shall  conduct  and 
manage  the  business  of  the  association.  The  board  of  managers  shall 
elect  a  secretary  from  their  number,  who  shall  keep  a  record  of  the 
proceedings  of  the  board  in  a  book  provided  for  the  purpose,  which 
he  shall  read  when  called  for  by  the  association,  and  which  shall  be 
open  at  all  times  for  inspection  of  members.  They  shall,  on  the  first 
day  of  May  and  November  of  each  year,  make  out  a  statement  of  the 
standing  of  the  association. 

Sec.  C.  Foreman.  It  shall  be  the  duty  of  the  foreman  to  act  as  fore- 
man of  the  shops  of  the  association ;  to  inspect  all  articles  manufac- 
tured, and  qnce  a  week  to  render  the  secretary  an  |accurate  statement 
of  the  number  of  articles  manufactured  during  the  week,  and  also  of 
the  number  and  price  of  all  articles  bought  and  sold. 

Sec.  7.  Installation.  All  officers  shall  enter  upon  their  respective 
duties  the  first  Monday  after  their  election. 

See.  8.  Vacancies.  Any  office  of  this  association  may  be  declared 
vacant  at  any  regular  monthly  meeting,  or  at  any  meeting  specially 
called  for  the  purpose,  by  a  two-thirds  vote  of  all  its  members,  and 
the  vacancy  thus  made  may  be  filled  at  the  same  meeting  by  a  major- 
ity vote  of  the  members  present.  The  officer  thus  elected  shall  hold 
office  during  the  remainder  of  the  unexpired  term  of  his  predecessor. 

Akticle  II.    Membership. 

Section  1.  Dxities  of  McTnbers.  Any  member  of  this  association  who 
leaves  his  berth  when  the  shops  are  running  on  full  time,  to  take  work 
elsewhere,  shall  forfeit  the  right  to  the  berth  which  he  has  vacated, 
but  should  a  member  leave  during  a  dull  season,  when  the  shops  are 
running  on  a  stent,  his  berth  shall  be  reserved  for  him  until  the  fore- 
man of  the  shops  shall  notify  him  to  return. 

Sec.  2.  Intoxicating  Liquors.  No  person  shall  be  allowed  to  bring 
intoxicating  liquors  into  any  shop  of  this  association,  or  to  be  drank 
upon  its  premi.ses. 


COOPEBAtlVE   tBODUCTiON".  141 


Sec.  3.  Withdrawals.  Any  member,  with  the  consent  of  the  board 
of  managers,  may  withdraw  from  this  association  by  giving  the  secre- 
tary notice  in  writing  of  liis  desire  to  do  so,  wlien  liis  membership 
shall  cease  and  be  determined;  provided,  he  sliall  immediately  sur- 
render his  certificate  of  stock  to  the  president,  and  receive  therefor  a 
note  with  interest  at  the  rate  of  five  per  cent  per  annum  for  all  mon- 
eys due  him  by  the  association,  payable  six  months  from  date. 

Abticle  III.   Expulsion. 

Section  1.  Forfeiture  of  Membership.  It  shall  be  the  duty  of  the 
foreman  to  reject  all  articles  made  by  members  of  the  association 
when  not  made  satisfactory,  or  according  to  instructions,  and  if  any 
member  shall  refuse  or  neglect  to  perform  his  work  in  a  workmanlike 
and  satisfactory  manner,  the  foreman  shall  report  to  the  president, 
who  shall  call  the  board  of  managers  to  examine  said  member's  work, 
and  if  they  deem  it  necessary,  shall  authorize  the  president  to  call  a 
meeting  of  the  company,  who  shall  have  the  power  to  discharge  said 
member  from  the  employ  of  the  company  by  a  two-thirds  vote  of  all 
members  of  the  company. 

Article  rv.    Capital  and  Shares. 

Section  1.  Stock.  Each  and  every  member  of  this  association  shall 
be  a  stockholder,  and  each  member  shall  hold  the  same  number  of 
shares. 

Sec.  2.  Transfers.  No  member  of  this  association  shall  dispose  of  or 
transfer  his  membership  without  the  consent  of  the  board  of  mana- 
gers, and  all  transfers  must  be  made  ujwn  the  books  of  the  company. 

Sec.  .3.  Interest.  Every  subscriber  shall  pay  fifteen  per  cent  down 
on  each  share  of  capital  stock  for  which  he  subscribes,  and  interest  on 
the  balance  at  the  rate  of  five  per  cent  per  annum  until  fully  paid,  ac- 
cording to  the  last  semi-annual  and  annual  settlement,  which  interest 
shall  be  paid  on  the  first  pay  days  of  April  and  October  of  each  year. 

Sec.  4.  Issninff.  Stock  may  be  issued  by  the  board  of  managers 
when  the  members  shall  at  any  general  meeting  by  a  two-thirds  vote 
so  direct. 

Sec.  5.  Applications.  No  person  shall  be  eligible  to  membership  In 
this  association  who  is  not  known  to  be  a  journeyman  cooper,  and  of 
good  moral  character.  Tlie  board  of  managers  shall  act  on  all  appli- 
cations for  membership  when  so  directed  by  the  association,  and  shall 
have  the  power  to  accept  or  reject  any  application  for  membership  in 
the  association. 

Article  V.    Dividends  and  Assessments. 

Section  1.  Settlement.  The  association  shall  pay  five  per  cent  inter- 
est per  annum  on  the  first  days  in  April  and  October  of  each  year  on 
all  moneys  actually  paid  in  on  each  share  of  capital  stock  at  the  time 
of  the  preceding  semi-annual  or  annual  settlement,  as  the  case  may  be. 

See.  2.  Appraispmetits.  The  real  estate  shall  bo  ai>])raiso(l  in  each 
semi-annual  and  annual  statement,  and  any  loss  or  gain  shall  be 
divided  pro  rata  per  share. 

Sec.  3.  Losses.  All  losses  by  fire,  or  failure  of  any  cori)oratlon  or 
business  firm,  shall  be  paid  pro  rata  i)er  share. 


142  HOW  TO  COOPERATE. 


Sec.  4.  Assessments.  There  shall  be  a  regular  weekly  assessment  of 
not  less  than  three  dollars  nor  more  than  live  dollars  upon  each  mem- 
ber when  the  shops  are  running  on  full  time.  When  not  running  on 
full  time,  the  amount  and  number  of  assessments  shall  be  fixed  by  the 
board  of  managers,  and  such  assessments  shall  be  regularly  made, 
and  applied  upon  the  unpaid  stock  of  such  member  until  the  full 
amount  subscribed  has  been  paid.  Any  member  failing  to  pay  his 
assessment  shall  be  fined  fifteen  per  cent  for  each  and  every  offense, 
unless  a  reasonable  excuse  be  given  to  the  board  of  managers. 

Sec.  5.  Payment  of  Assessments.  All  asses.snients  and  fines  levied  by 
this  association  shall  be  paid  on  the  first  pay  day  thereafter,  and  shall 
be  deducted  from  the  weekly  pay  of  the  members.  All  losses,  so  far 
as  may  be,  shall  be  paid  out  of  the  regular  weekly  assessment,  and  the 
balance  applied  in  payment  of  subscriptions  of  stock. 

Sec.  6.  Dividends.  The  board  of  managers  shall,  at  the  semi-annual 
and  annual  meeting  held  on  the  second  Wednesday  of  May  and  No- 
vember of  each  year,  declare  all  dividends  or  losses,  and  the  amount 
thereof.  When  a  dividend  is  declared  it  shall  be  paid  in  cash  within 
thirty  days  thereafter,  to  such  members  as  have  fully  paid  up  all  their 
subscriptions.  Those  who  have  not  fully  paid  up  shall  have  the 
amount  of  the  dividend  applied  upon  the  unpaid  balance  of  their  cap- 
ital stock. 

Sec.  7.  Gains  and  Losses.  All  gains  or  losses  on  the  work  of  hired 
help,  or  on  the  manufacture  and  sale  of  stock,  shall  be  apportioned 
pro  rata  per  member. 

Sec.  8.  Other  Points.  All  gains  or  losses  not  otherwise  provided  for 
shall  be  apportioned  pro  rata  upon  the  wages  received  by  each 
member. 

Article  VI.    Death. 

Section  1.  In  case  of  the  death  of  a  member,  this  company  shall  pay 
to  his  lawful  heirs,  upon  surrender  of  the  certificate  of  stock,  all 
moneys  known  by  the  officers  to  be  due  them. 

Article  VII.    Auditing  Committee. 

Section  1.  The  association  shall  ajipoint  a  committee  consisting  of 
three  members,  at  the  regular  meetings  in  April  and  October  of  each 
year,  to  audit  the  accounts  of  the  association,  and  report  at  the  semi- 
annual and  annual  meetings. 

Article  Vlll.    Meetings  and  Quorum. 

Section  1.  Meetings.  Tlie  semi-annual  and  annual  meetings  of  this 
association  shall  be  held  on  the  second  Wednesday  of  May  and  No- 
vember of  each  year.  A  regular  monthly  meeting  shall  be  held  on  the 
first  Wednesday  of  each  and  every  month.  Special  meetings  may  be 
called  at  any  time  by  the  president,  upon  the  written  request  of  seven 
members  of  the  company. 

Sec.  2.  Quorum,.  Fifteen  members  may  constitute  a  quorum  for  the 
transaction  of  business  at  any  regular  meeting.  If  less  numbers  ap- 
pear at  the  stated  meeting  tliey  may  adjourn  for  future  day. 

See  3.  Shop  Rules.  All  shop  rules  adopted  by  this  association  shall 
be  equally  binding  with  these  by-laws  upon  every  member. 


CHAPTEE  VI. 

COOPERATIVE    DATRYIKG. 

Just  What  It  is. — By  the  cooperative  system  the 
dairymen  organize  a  corporation  on  a  cooperative  basis, 
furnish  the  necessary  capital  for  factory  and  appliances, 
and  manage  the  business  through  a  board  of  directors 
elected  by  the  stockholders.  Thus  any  profit  in  the 
business  is  returned  to  the  dairymen,  instead  of  the  lion's 
share  being  taken  by  the  proprietor  of  a  factory.  Under 
this  management,  the  cooperative  creamery  and  cheese 
factories  will  pay  from  five  to  twenty  per  cent  better 
returns  to  the  farmers  than  proprietary  factories,  during 
a  term  of  years.  Cooperation  enables  the  dairymen  to 
get  all  the  profit,  while  at  the  same  time  reducing 
expenses. 

Factory  cheese-making  has  come  to  be  the  general 
practice,  the  quantity  of  cheese  made  on  farms  being  a 
comparatively  unimportant  factor  in  the  dairy  situation. 
The  creamery  system  or  factory  method  of  butter-making 
is  now  rapidly  supplanting  the  making  of  butter  on  the 
farm  in  a  small  way.  The  cooperative  systeta  greatly 
reduces  the  work  on  the  farm  and  in  the  home,  while 
adding  to  profits  without  going  to  a  great  outlay  of  time 
and  capital  to  change  methods  of  farming. 

In  organizing  cooperative  companies  for  the  manu- 
facture of  butter  or  cheese,  or  both,  it  is  first  necessary 
that  farmers  should  become  thoroughly  posted  upon  the 
cooperative  system  and  its  advantages.  The  cooperator, 
in  dairying  as  in  other  affairs,  must  recognize  that  he 
has  a  duty  to  perform  as  well  as  the  company. 

143 


144  HOW  TO   COOPERATE. 

The  Best  Way  to  Proceed  is  as  follows :  Those 
most  interested  should  talk  up  the  matter,  secure  further 
particulars  by  corresponding  with  the  successful  coopera- 
tive factories  mentioned  in  the  Appendix,  also  the  vari- 
ous dealers  (not  one  alone)  in  factory  and  creamery  sup- 
plies, and  then  call  a  meeting  of  the  farmers  to  consider 
the  whole  subject.  At  this  first  meeting  a  committee 
on  by-laws  should  be  appointed,  also  a  canvassing  com- 
mittee, and  perhaps  a  third  committee  to  ascertain  any 
facts  not  stated  to  the  meeting.  An  adjournment  should 
then  be  taken  for  two  or  three  weeks,  just  far  enough 
ahead  to  give  the  committees  time  to  do  their  work  and 
canvass  the  locality  for  subscriptions  to  the  capital  stock, 
bnt  not  long  enough  to  allow  interest  in  the  matter  to 
cool.  More  will  be  accomplished  by  pushing  things  in 
short  order  than  by  moving  too  slowly.  At  the  same 
time  care  should  be  taken  to  make  no  mistake. 

The  committee  on  by-laws  especially  should  report  a 
scheme  of  organization  that  shall  be  thoroughly  legal 
under  the  State  laws.  At  the  adjourned  meeting,  or 
as  early  as  possible,  the  association  should  be  legally  per- 
fected and  a  portion  or  all  of  the  capital  stock  paid  in. 
Not  until  this  is  done  should  the  question  of  the  location 
of  cheese  factory  or  creamery  be  decided,  because  on 
this  point  there  are  often  serious  differences  of  opinion 
which  may  be  carried  to  the  extent  of  disruption  if  the 
cooperators  are  not  sufficiently  bounden  to  hold  together 
until  they  have  learned  that  cooperation  means  the 
greatest  good  to  the  greatest  number  as  well  as  absolute 
justice  to  each  individual.  Many  points  as  to  the  prac- 
tical management  of  the  business  and  conduct  of  the 
factory  are  to  be  considered  in  locating  it.  Accessibility 
to  patrons  and  to  depot,  freight,  express  and  telegraph, 
— good  water,  perfect  drainage,  good  roads,  cheap  ice, 
freedom  from  anything  that  might  contaminate  the  qual- 
ity of  the  butter — all  these  points  must  be  attended  to. 


COOPERATIVE    DAIRYING.  145 

What  to  Avoid. — The  creamery  '.'sharks,"  who 
excite  farmers  in  out-of-the-way  places  by  marvelous 
stories  of  creamery  profits,  should  be  given  a  wide  berth. 
The  market  reports  show  what  butter  sells  for.  No 
method  of  working  milk  will  get  out  of  it  moife  butter 
than  there  is  in  it.  Judge  df  what  a  creamery  can  do 
in  your  section  by  investigating  as  to  what  the  system 
accomplishes  in  towns  where  the  conditions  are  similar 
to  your  own.  Avoid  a  big  capital ;  $1,200  to  $3,000  is 
enough  for  300  to  1,000  cows.  Above  all,  investigate 
thoroughly  the  various  systems  of  creamery  management, 
and  adopt  the  one  which  seems  best  and  cheapest  for 
your  special  circumstances.  Don't  take  the  estimate  of 
any  single  outfitter  of  creameries,  but  get  bids  from 
them  all. 

THE   ASSOCIATED  CREAMERY. 

Its  Benefits. — The  butter  made  by  forty  different 
housewives  is  of  forty  different  kinds,  put  up  in  forty 
different  styles,  and  worth  forty  different  prices.  It  has 
forty  different  colors,  forty  different  grains,  forty  differ- 
ent flavors,  and  forty  different  degrees  of  saltness.  Now 
take  all  this  cream,  let  it  be  mixed  and  made  by  one 
experienced  butter-maker,  atid  the  forty  different  kinds 
are  blended  into  one,  with  only  one  grain,  flavor,  color 
and  taste.  The  price  at  once  goes  up  because  it  is  uni- 
form and  the  one  quality  can  be  obtained  in  larger  quan- 
tities. Creamery  butter  sells  at  from  four  to  ten  cents 
per  pound  above  the  bulk  of  farmers'  butter. 

Another  Great  Saving  is  that  it  takes  the  work  out 
of  the  house  and  gives  the  housewife  more  time  for  her 
other  work  and  a  chance  for  reading  or  other  enjoy- 
ments. This  is  seldom  taken  into  consideration  in  fig- 
uring up  the  profits,  but  should  not  be  lost  sight  of,  for 
it  is  a  big  factor.  Many  things,  such  as  the  kind  of 
man,  kind  of  cows — breed,  feed  and  care — and  ability  of 
the  butter-maker,  influence  the  quality  of  butter  and 
10 


146 


HOW   TO   COOPERATE. 


the  price  obtained  for  it.  If  everything  is  first-class, 
then  the  top  price  will  be  obtained  for  the  butter,  while 
if  any  one  thing  is  only  second  or  third  rate,  the  butter 
will  be  the  same  and  the  price  accordingly.  The  reason 
creamery  butter  is  sought  after  in  the  markets  at  a 
higher  price  than  dairy  butter  is  because  of  its  uniform- 
ity. Tlie  better  the  grade  the  higher  the  price  that 
it  commands. 

The  cooperative  creamery  is  practical  and  sensible  and 
should  be  adopted  in  every  neighborhood  where  dairying 
is  practiced  to  any  extent  and  there  are  enough  cows  to 


■f^L!M^>^ 


no.  16.    Elevation   of   a  Model  Ci!eam  Gathering   Butter 
Factory. 


support  one.     They  have  been  made  successful  in  the 
past  and  they  will  be  more  so  in  the  future. 

A  Practical  Success. — Farmers  to  whom  the  idea 
is  new  will  be  surprised  at  the  number  of  cooperative 
creameries  already  in  successful  operation.  Out  of  more 
than  one  hundred  and  fifty  creameries  in  New  England 
alone,   eighty  per    cent    are  thoroughly   cooperative — 


COOPEBATIV^E  DAIRYING.  147 

owned  by  the  farmers,  managed  by  their  directors, 
through  a  superintendent  employed  under  their  super- 
vision, and  all  receipts  (setting  aside  a  reserve  fund  and 
five  or  six  per  cent  on  capital  stock)  above  expenses  de- 
clared in  dividends  on  the  milk  or  cream  furnished. 
Some  of  these  cooperative  creameries  are  ten  to  fifteen 
years  old.  The  returns  from  thirty  of  them  for  the  year 
ended  Jan.  1,  1891,  showed  payments  net  to  patrons  for 
cream  taken  at  the  farmers'  door  of  twenty-one  cents  per 
pound  of  butter  as  the  average  for  the  year,  in  spite  of 
the  lowest  market  known  for  years.  In  ordinary  markets 
the  best  creameries  pay  twenty-four  to  twenty-seven  cents 
net  to  patrons  for  the  whole  year.  The  capital  varies 
from  $3,000  to  $4,000,  product  from  20,000  to  350,000 
pounds,  and  total  payments  to  patrons  from  $4,000  to 
$75,000  in  the  year.  Massachusetts'  cooperative  cream- 
eries made  6,000,000  pounds  of  butter  in  1890,  and  Con- 
necticut's nearly  as  much. 

In  most  of  the  Central  and  Western  States  no  such 
proportion  exists  of  cooperative  to  proprietary  creamer- 
ies. Yet  many,  perhaps  the  greater  part  of  them,  while 
owned  and  managed  individually,  are  nevertheless  oper- 
ated, to  a  large  extent,  on  a  modification  of  tlie  coopera- 
tive plan.  That  is  to  say,  the  patrons  furnish  the  milk, 
the  manufacturer  makes  it  up  at  a  given  price,  sells  it, 
and  the  net  proceeds  (be  the  same  more  or  less)  are  dis- 
tributed among  the  patrons.  A  considerable  number, 
but  probably  not  one-fourth  of  the  total  number,  are 
owned  and  managed  by  the  patrons  or  cooperatively. 

Reasons  for  Failure. — The  scarcity  of  such  cream- 
eries in  the  West  is  due  to  the  fact  that  dairymen 
have  been  victimized  to  a  large  extent  by  creamery 
sharks,  in  the  manner  described  under  the  heading, 
"What  to  avoid."  A  large  number  of  creameries  estab- 
lished under  such  auspices  are  now  defunct.  They  rep- 
resent an  investment  of  from  $5,000  to  $7,000  whore 


148  HOW  TO  COOPERATE. 

$2,000  or  13,000  would  have  been  abundant.  Such 
factories  can  often  be  bought  up  for  a  few  cents  on  the 
dollar,  and,  reorganized  on  a  thoroughly  cooperative 
basis,  can  be  made  to  pay  under  careful  management. 

Another  great  difficulty  has  been  that  the  creamery 
was  operated  only  during  the  summer,  when  prices  of 
butter  were  low.  It  must  run  twelve  months  in  the 
year  for  the  best  success,  and  make  more  butter  in  win- 
ter than  in  summer.  This  plan  will  also  pay  the  farmer 
much  better  than  the  prevalent  over-productive  summer 
dairies. 

Again,  the  factory  must  be  well  patronized  by  the 
farmers,  for  the  greater  the  product  the  less  the  expenses 
per  pound  and  the  greater  the  net  returns  to  farmers. 
The  more  concentrated  the  milk  or  cream  routes  the  less 
the  cost  of  gathering  cream  or  milk.  The  butter  ex- 
tractor, however,  may  enable  one  central  factory  to 
cover  a  much  larger  area  than  is  now  possible. 

The  Michigan  Method — In  many  cases  the  method 
of  payment  employed  in  the  successful  cooperative 
creameries  in  the  East  is  modified  in  the  West.  The 
method  at  the  only  (1890)  associated  creamery  in  Michi- 
gan, which  is  quite  successful,  is  thus  described  by  Man- 
ager S.  J.  Wilson,  of  Flint : 

"Our  stock  is  divided  into  shares  of  twenty-five  dol- 
lars each.  No  person  can  hold  more  than  two  shares  of 
stock.  We  purchase  cream,  paying  about  the  price  of 
dairy  butter,  from  stockholders  and  those  who  are  not, 
just  alike.  We  keep  a  margin  between  the  price  we  pay 
for  cream  and  what  we  sell  the  butter  for,  so  as  to  cover 
expenses  and  a  little  more  all  the  time.  We  take  sam- 
ples and  test  each  man's  cream  every  time  and  pay  ac- 
cording to  the  butter  value  shown  by  these  tests.  The 
first  of  April  and  October,  or  twice  a  year,  we  pay  seven 
per  cent  interest  on  the  stock,  and  the  balance  is  declared 
as  a  dividend,  not  upon  the  stock,  but  upon  the  stock- 


COOPERATIVE  DAIRYING. 


149 


^  z 

^  - 


i 


160  HOW  TO  COOPERATE. 

holders'  cream  or  butter,  according  to  the  amount  fur- 
nished. No  one  is  allowed  to  share  in  the  profits  of 
cooperation  unless  they  take,  at  least,  one  share  of  stock. 
We  have  a  board  of  directors  who  meet  once  a  month, 
or  when  called  together  by  the  manager,  who  lay  down 
the  rules  to  govern  the  business  of  the  company.  The 
manager  has  full  power,  under  the  directors.  He  hires 
all  the  help,  sets  the  price  on  the  cream  and  sells  the 
butter.  He  is  also  treasurer  aud  pays  for  the  cream, 
labor,  and  all  supplies.  He  makes  a  statement  of  the 
business  the  first  of  each  month,  for  the  preceding 
month,  also  a  financial  statement  w^iich  the  directors 
examine  and  pass  upon.  In  fact,  he  has  full  control  of 
everything  under  the  instructions  of  the  directors.  Our 
books  and  mode  of  testing  the  cream  are  open  to  the 
inspection  of  patrons  at  all  times.  Our  patrons'  cream 
account  we  keep  in  a  special  ledger,  so  we  can  tell>  in  a 
moment,  just  how  many  gauges  of  cream  any  patron  has 
furnished,  what  per  cent  it  tested,  how  much  butter  it 
made  and  what  it  came  to.  "We  believe  these  are  the 
right  principles  on  which  to  operate  a  cooperative  cream- 
ery and,  if  rightly  managed,  will  result  in  great  benefit 
to  all  parties  concerned." 

The  By-Laws  and  Rules — These  vary  somewhat 
in  different  sections,  but  a  good  model  are  the  following, 
which  are  generally  used  in  the  New  England  and 
Northwestern  cooperative  creameries : 

I.  Tills  iissociation  shall  be  known  as  the cooperative  cream- 
ery association. 

II.  The  purpose  of  the  association  shall  be  to  locate,  establish  and 
carry  on  the  manufacture  and  sale  of  milk  products,  in  such  a  manner 
as  will  conduce  to  the  greatest  convenience  and  prolit  of  the  producers 

over  the  greatest  amount  of  territory  in  the  town  of and  vicinity. 

Also  to  purchase,  use,  and  hold  real  and  personal  estate  necessary  for 
the  transaction  of  the  business  of  the  association. 

III.  The  cai)ital  stock  of  the  association  shall  be dollars,  di- 
vided into shares  of  ten  dollars  each. 

IV.  This  association  shall  be  cooperative.  Cream  or  milk  may  be 
purchased  or  accepted  from  any  person  not  a  stockholder  on  the  same 
terms  and  conditions  as  may  be  prescribed  for  stockholders. 


COOPERATIVE   DAIRYING.  151 

v.  Any  person  directly  engaged  In  agricultural  pursuits  may  be- 
come a  member  of  tliis  association  by  taking  one  or  more  siiares  of 
tlie  stoclc  of  tlie  association. 

VI.  1.  The  regular  meetings  of  the  association  shall  be  held  semi- 
annually, viz.,  on  the  first  Monday  in and  in in  each  year, 

at  such  time  and  place  as  the  board  of  directors  may  determine,  and 
notice  of  such  meeting  shall  be  given  by  the  clerk  to  each  member  by 
mail  seven  days  at  least  previous  to  the  date  of  said  meeting.  2.  Spe- 
cial meetings  may  be  called  either  by  the  president  with  the  advice 
and  consent  of  a  majority  of  the  directors,  or  upon  written  request  of 
one-third  of  the  stockholders  of  the  association,  »ipon  seven  days' 
nt)tice  as  above.  3.  Meetings  of  the  board  of  directors  may  be  called 
by  the  president  or  by  any  two  directors. 

VII.  1.  Tlie  ofiRcers  of  the  association  shall  consist  of  a  president, 
clerk,  treasurer,  five  directoi-s  and  two  auditoi-s.  2.  The  president 
shall  be  chosen  annually  by  the  board  of  directors,  by  written  ballot, 
at  the  regular  meeting  in  October.  3.  The  clerk,  treasurer,  board  of 
directors  and  auditors  shall  be  chosen  by  the  stockholders  annually, 
by  written  ballot,  at  the  regular  meeting  in  October,  and  all  ofBcers 
shall  hold  office  till  others  are  chosen  and  qualified  in  their  stead. 
Vacancies  in  the  above-named  offices  may  be  filled  at  any  meeting  of 
the  stockholders;  in  the  meantime  by  the  board  of  directors.  In  case 
of  the  absence  of  the  clerk,  a  temporary  clerk  may  be  chosen  and  quali- 
fied in  his  stead. 

VIII.  At  any  regularly  called  meeting  of  the  association  nine  of  the 
members  thereof,  and  at  any  meeting  of  the  board  of  directors  three 
members  thereof,  shall  constitute  a  quorum  for  the  transaction  of  busi- 
ness.   A  less  number  may  adjourn  from  time  to  time. 

IX.  It  shall  be  the  duty  of  the  president,  who  shall  be  a  director,  to 
preside  at  all  meetings  of  the  association,  and  of  the  board  of  directors, 
preserve  order  therein,  put  all  questions,  announce  all  decisions,  and 
in  case  of  an  equal  division  to  give  the  casting  vote.  He  shall  receive 
and  safely  preserve  all  bonds  required  of  the  officers  of  the  association 
and  sign  all  certificates  or  documents  issued  by  the  association  or 
board  of  directoi-s.  In  the  absence  of  the  president,  it  shall  be  the 
duty  of  one  of  the  board  of  directors,  in  the  order  of  their  seniority,  to 
preside  at  any  meeting. 

X.  It  shall  be  the  duty  of  the  clerk  to  attend  all  meetings  of  the 
association  and  of  the  board  of  directors,  and  to  keep  a  correct  record 
of  the  same,  which  record  sliall  be  open  for  the  inspection  of  any  mem- 
ber. He  shall  give  notice  of  all  meetings,  and  of  all  appointments  on 
committees,  to  each  member  thereof,  and  to  each  officer  chosen  of  his 
election,  and  shall  serve  all  .such  other  notices  as  appertain  to  his  office 
or  as  may  be  directed  from  time  to  time  by  the  association  or  board  of 
directors.  He  shall  attest  all  certificates  or  documents  issued  signed 
by  the  president,  shall  file  all  blUs  and  reports  and  such  other  docu- 
ments as  may  be  ordered  to  be  filed,  and  shall  carry  on  all  such  corres- 
pondence as  may  be  directed;  shall  act  as  secretary  of  all  committees 
when  called  upon;  shall  keep  a  correct  financial  account  between  the 
association  and  its  members,  and  shall  have  charge  of  all  property  not 
otlierwise  disposed  of.  He  shall  give  such  bonds  for  tlie  faithful  per- 
formance of  his  duty,  and  r<n'<'iv{>  sndi  compensation  for  his  services, 
as  the  board  of  directors  may  determine. 


108 


HOW  TO  OO6PERATB. 


XI.  It.  shall  be  the  duty  of  the  treasurer  to  receive  all  money  belong- 
ing to  the  association,  giving  his  receipt  therefor.  He  shall  draw  all 
money  for  the  payment  of  trlaims  against  the  association  under  the 
direction  of  the  board  of  directors.  He  shall  m.ake  a  report  to  the 
board  of  directors  at  such  times  as  they  may  require.  He  shall  per- 
form all  duties  required  of  him  by  the  laws  of  the  commonwealth  and 
shall  give  such  bonds  for  the  faithful  performance  of  his  duty  as  the 
board  of  directors  may  require. 

XII.  It  shall  be  the  duty  of  the  board  of  directors  to  attend  to  the 
general  affairs  of  the  association,  invest  the  funds  of  the  same,  appoint 
such  other  agents  and  officers  as  in  their  judgment  the  interests  of  the 
association  require,  and  fix  all  compensations.  They  shall  keep  or 
cause  to  be  kept  a  correct  account  of  all  cream  or  milk  furnished  by 
the  stockholders  or  patrons,  and  a  correct  account  of  all  sales.    They 


Fig.  18.   Elevation  of  a  Cheese  Factory. 


shall  prescribe  the  rules  and  regulations  governing  the  collection  and 
delivery  of  cream  and  milk ;  may  cause  the  quality  of  the  same  to  be 
tested  as  often  as  may  be  deemed  expedient ;  may  authorize  the  prem- 
ises of  any  stockholder  or  patron  to  be  inspected,  and  may  reject  and 
refuse  to  collect  or  receive  any  cream  or  milk  that  is  unsatisfactory  or 
not  furnished  in  compliance  with  the  prescribed  regulations.  They 
shall  establish  prices,  and  have  full  power  over  the  business  of  the 
association,  and  in  all  cases  pursue  such  measures  as  in  their  judgment 
will  tend  to  the  best  interests  of  the  association.  They  shall  make  a 
full  report  of  their  doings,  and  a  full  statement  of  the  business  at  each 
regular  meeting,  or  whenever  called  upon  to  do  so  by  vote  of  the 
stockholders. 

XIII.  The  duties  of  the  auditors  shall  be  to  atidit  all  accounts  of  the 
association,  making  a  report  to  the  board  of  directors  at  the  time  of 
the  regular  meetings,  and  at  such  other  times  as  they  may  require. 


COdPEUATIVE   DAIRYING.  158 

XIV.  The  net  profits  of  the  business  of  the  association,  after  such 
deductions  liave  been  made  as  the  laws  of  the  commonwealth  require, 
shall  be  divided  pro  rata  among  the  stockholders  according  to  the 
number  of  shares  held  by  each.  [Note.  It  is  understood  that  the  prof- 
its shall  not  exceed  six  per  cent  on  capital,  all  receipts  in  excess  of 
this  sum  and  necessary  reserves  being  declared  in  payments  to  patrons 
for  cream  or  milk  furnished.] 

XV.  1.  Any  person  doing  business  for  the  association,  or  incurring 
expense  therefor,  sliall  receive  a  just  remuneration  for  such  services  or 
expense.  2.  All  documents  issued  by  the  association  shall  bear  the 
seal  thereof,  said  seal  to  be  in  charge  of  the  clerk.  3.  The  directors 
shall  procure  a  corporate  seal.  4.  No  member  of  the  association  can 
transfer  his  stock  to  any  person  not  directly  engaged  in  agricultural 
pursuits.  5.  In  case  sliares  are  transferred  by  one  person  to  another, 
the  certificate  thereof  must  be  surrendered  to  the  treasurer,  and  the 
board  of  directors  shall  cause  another  certificate  to  be  issued  to  the 
person  to  whom  the  transfer  is  made. 

XVI.  These  by-laws  shall  not  be  altered  or  amended  unless  such 
alteration  or  amendment  be  proposed  in  writing,  one  meeting  previous 
to  action  being  taken ;  provided  also  that  two-thirds  of  the  members 
vote  in  the  affirmative. 

THE   COOPERATIVE   CHEESE   FACTORY. 

Extent  of  the  System. — Probably  nine-tenths  of 
the  best  cheese  factories  in  Central  New  York  are  run 
on  the  cooperative  plan.  Fully  fifty  per  cent  of  the 
cheese  factories  in  the  Northwestern  and  Middle  States 
are  cooperatively  managed.  In  the  Central  and  West- 
ern States  the  proportion  of  proprietary  factories  is  much 
larger.  Even  in  the  great  dairy  State  of  Wisconsin 
only  about  half  of  the  factories  are  cooperative.  It  is 
safe  to  estimate  that  sixty  per  cent  of  the  cheese  made 
in  factories  in  the  United  States  is  the  product  of  coop- 
erative effort.  The  system  has  been  found  altogether 
successful,  yet  there  are  many  thousands  of  neighbor- 
hoods that  might  benefit  by  a  cheese  factory,  but  yet  go 
without,  waiting  for  a  proprietary  factory  to  be  built. 

Two  General  Systems  Prevail. — In  one,  the  pa- 
trons contribute,  in  proportion  to  the  number  of  cows 
they  own,  toward  the  expense  of  erecting  a  building  and 
procuring  the  necessary  outfit.  They  select  a  manager 
or  managing  committee,  who  employ  the  necessary  help, 
purchase  the  needed  supplies,  market  the  cheese,  deduct 


164 


HOW  TO   COOPERATE. 


all  expenses  from  the  amount  received  for  sales  and 
divide  the  net  proceeds  to  each  patron  according  to 
the  amount  of  milk  furnished.  Those  who  have  not 
contributed  to  the  capital  stock  are  charged  a  small  sum 
for  the  use  of  the  factory.  This  method  is  the  one 
which  gives  the  best  results  because  it  maintains  the 
most  constant  interest  on  the  part  of  the  farmers  and 
their  representatives.- 

In  the  Other  System  the  patrons  erect  the  build- 


Tir  -rm"']  JT 


Fig.  19.    Ground  Plan  of  Cheese  factory. 

ing  and  engage  or  contract  with  some  individual  or  com- 
pany to  furnish  the  outfit  and  manufacture  the  cheese 
at  a  stated  price  per  pound.  More  frequently  the 
farmer-company  furnishes  machinery  and  building,  con- 
tracting with  the  cheese-maker  to  do  the  work  and  pro- 
vide the  supplies  at  a  stated  price.  The  latter  is  not 
the  strictly  cooperative  method,  and  is  only  recom- 
mended where  inefficiency  among  farmers  prevents  their 
own  company  managing  the  business  successfully. 
Where  factories  are  run  under  contract,  the  cheese- 
maker   usually  charges  $1   to   $1.10  per  one  hundred 


COOPERATIVE   DAIRTISTG.  155 

i)Ounds  for  making  cheese  and  furnishing  supplies,  the 
dairymen  delivering  the  milk  at  the  factory.  In  some 
instances  the  cheese-maker  guarantees  the  quality  of 
cheese,  and  m  others  does  not.  The  same  general  princi- 
ples apply  to  organizing  a  cooperative  cheese  manufactu- 
ring company  that  are  true  of  cooperative  butter-making. 
The  Regulations  for  a  Cheese  Factory  may  be 
substantially  like  those  in  vogue  in  the  great  cheese- 
making  sections  of  New  York  State,  in  substance  as 
follows : 

Article  1.  This  association  shaU  be  known  as  the  the Fac- 
tory Association. 

Art.  2.  Tliere  shaU  be  two  meetings  lield  yearly  at  the  factory — one 
in  the  spring  and  one  in  the  fall  or  winter,  to  be  called  by  the  president. 

Art.  3.  At  the  first  meeting  in  each  year  there  shall  be  chosen  by  the 
patrons  a  president  and  a  treasurer  and  salesman. 

Art.  4.  The  salesman  and  treasurer  shall  sell  all  the  cheese,  and  as 
soon  as  he  shall  have  sold  and  collected  for  one  month's  make  of 
cheese,  he  shall,  after  paying  the  proprietor  for  making  and  deducting 
the  other  expenses,  divide  the  proceeds  pro  rata,  according  to  the  num- 
ber of  pounds  of  milk  delivered  among  the  patrons. 

Art.  6.  It  shall  also  be  the  duty  of  the  treasurer  and  salesman  to  keep 
the  books  of  the  association,  and  make  a  final  dividend  yearly,  to  all 
the  patrons,  whenever  all  the  cheese  is  sold  and  paid  for.  He  shall 
also  keep  a  milk  book,  showing  the  number  of  cheese  made  each 
month,  to  be  taken  from  the  factory's  books.  Said  treasurer's  milk 
and  cheese  book  shall  be  subject  to  the  inspection  of  the  patrons  and 
president. 

Art.  6.  The  manager  shall  keep  an  accurate  account  with  each  patron 
of  the  number  of  pounds  of  milk  delivered  each  day.  Also  an  account 
of  the  number  of  cheese  made,  which  accounts  shall  be  subject  to  the 
inspection  of  the  officers  and  patrons. 

Art.  7.  The  president  shall  be  authorized  to  preside  over  the  entire 
transactions  of  patrons  or  officers,  and  constitute  a  committee  to  inves- 
tigate all  matters  pertaining  to  said  factory,  and  if  any  contingency 
sliould  arise,  he  shall  be  authorized  to  bring  suit  in  law  against  any 
delinquent. 

Art.  8.  The  manager  (cheese-maker)  shall  be  authorized  to  criticise 
all  milk  ofl'ered,  and  he  shall  reject  the  same  if  in  his  judgment  said 
milk  is  unfit  to  run  into  cheese;  also  to  test  with  lactometer  any  milk, 
and  if  found  to  vary  from  a  standard  of  milk  known  to  be  pure  for  the 
day  shall  report  the  same  to  the  president,  whose  duty  it  shall  be  to 
send  out  a  committee  of  three  to  the  premises  of  said  delinquent,  wit- 
nessing the  transit  of  the  milk  on  the  ensuing  day  from  the  cow  to 
the  factory,  which  shall  again  be  testeil  as  on  the  previous  day,  and  if 
found  to  vary  the  party  in  qtiestion  shall  be  adjudged  guilty  of  having 
diluted  the  same  in  ratio,  as  shall  aiijx'ar.  The  penalty  for  the  first 
offence  shall  be  twenty-five  dollars;  second,  one  hundred  dollars. 


156 


HOW  TO  COfiPERATE. 


Art.  9.  Tlie  president  shall  also  have  power  to  call  special  meetings 
of  the  patrons  at  any  time  he  may  deem  it  necessary,  and  he  shall  be 
reqnired  to  call  a  meeting  of  the  patrons  whenever  a  re<iuest  is  pre- 
sented to  him  signed  by  ten  patrons.'  Whenever  a  meeting  is  to  be 
called  the  president  shall  give  patrons  at  least  two  days'  notice. 

Art.  10.  The  action  of  the  treasurer  and  salesman  in  regard  to  selling 
or  holding  cheese  shall  be  governed  by  a  vote  of  a  majority  of  tlie 
patrons.  If  no  vote  is  taken,  he  Is  to  exercise  his  best  judgment  in  the 
matter. 

Art.  11.  In  voting  at  any  annual  or  special  meeting  of  this  associa- 
tion, the  patrons  shall  be  allowed  one  vote  for  every  cow  the  milk  of 
which  is  brought  to  the  factory.  [This  may  be  altered  to  one  vote  on 
each  share  of  the  capital  stock  or  one  vote  to  each  shareholder.] 

Art.  12.  The  treasurer  and  salesman  shall  attend  all  meetings  of  the 
association  whenever  possible,  and  shall  take  minutes  of  the  proceed- 
ings, and  place  the  same  on  file  in  his  oflace,  and  in  otlier  respects  act 


Fig.  20.    Second  Story  of  Cheese  factory. 

as  secretary.  In  case  he  should  be  absent,  a  temporary  secretary  may 
be  chosen.  In  case  the  president  is  absent  at  any  meeting,  a  tempo- 
rary president  may  be  chosen  for  a  presiding  officer. 


COOPERATIVE   MILK   COMPANIES. 

The  Distribution  of  Milk  in  cities  at  present  sup- 
ports an  enormous  number  of  middlemen  who  get  the 
larger  share  of  the  profits.  Farmers  who  furnish  milk 
to  these  markets  receive  only  from  one  to  three  cents 
per  quart  for  their  milk,  according  to  the  locality  and 
season.  Consumers  pay  five  to  ten  cents  per  quart ; 
middlemen  set  the  difference  in  prices.     In  a  few  places 


COOPEEATITE  DAIKTING.  157 

the  producers  have  united  in  a  cooperative  company  to 
peddle  the  milk  themselves.  The  oldest  instance  of  this 
kind  is  the  Onondaga  milk  association  of  Syracuse,  N.Y. 

This  plan  was  original  with  the  promoters,  especially 
with  C.  L).  Avery,  for  several  years  its  secretary  and 
treasurer,  who  now  holds  a  like  position  in  the  Central 
New  York  Pomona  Exchange — a  new  effort  at  coopera- 
tive distribution  among  farmers.  Tlie  Onondaga  Asso- 
ciation has  a  special  charter,  dated  March  9,  1872,  but 
this  is  not  needed  under  the  corporation  or  cooperative 
laws  that  exist  in  most  States  to-day.  Starting  with 
$5,060  capital,  this  increased  to  nearly  170,000,  but  is 
now  being  retired,  over  $8,000  having  been  bought  in 
during  1890.  The  association  has  net  assets  of  $105,000 
and  is  quite  prosperous,  though  its  benefits  are  mainly 
confined  to  its  shareholders  (who  all  furnish  milk),  out- 
side producers  getting  no  dividend  on  milk  above  the 
usual  market  price  paid.  The  by-laws  are  similar  to 
those  of  other  cooperative  associations,  the  business  be- 
ing mainly  in  charge  of  an  executive  committee  amena- 
ble to  the  directors.  The  treasurer  delivers  monthly 
statements  to  the  directors  of  milk  received  and  deliv- 
ered, and  the  directors  "cause  to  be  made  and  declare 
to  be  paid  a  dividend  to  the  shareholders  according  to 
the  quantity  of  milk  received  from  them  respectively 
during  the  preceding  month,  out  of  the  net  profits  then 
in  the  hands  of  the  treasurer." 

The  Syracuse  company  was  originally  formed  by  a 
union  of  several  farmers  who  peddled  their  own  milk, 
who  took  shares  on  the  basis  of  twenty  dollars  for  each 
cow.  The  average  milk  of  one  cow  was  estimated  at  six 
quarts  daily,  and  peddlers  who  sold  in  excess  of  their 
own  production  were  awarded  shares  on  this  basis  for 
their  routes.  Members  were  required  to  furnish  milk  in 
proportion  to  the  stock  held  by  them,  the  directors  hav- 
ing authority  to  refuse  any  or  all  milk  in  excess  of  this 
proportion. 


158  HOW   TO   C05PERATE. 

The  Springfield  cooperative  milk  association  of  Spring- 
field, Mass.,  is  also  quite  successful,  returning  the  far- 
mers an  average  of  three  cents  per  quart  net  for  all 
milk  they  furnished  in  the  year  1890,  besides  returning 
clean  cans.  This  is  much  better  than  the  average  price 
received  by  those  who  shipped  milk  to  Boston  or  New 
York  during  the  same  year.  The  Springfield  association 
handles  2,500,000  quarts  of  milk  and  the  Syracuse  com- 
pany upward  of  3,000,000  quarts  annually,  with  cream, 
butter  and  cheese  to  correspond.  The  saving  to  farmers 
is  from  one-quarter  to  one  cent  per  quart,  to  say  nothing 
of  many  other  advantages. 

An  attempt  is  now  (1891)  being  made  to  organize  a 
similar  company  for  the  control  of  the  New  York  mar- 
ket. Its  name  is  the  Union  milk  company,  C.  0.  Smith, 
of  Meadow  Brook,  Orange  County,  N.  Y.,  being  the 
secretary.  A  similar  project  has  been  much  discussed  by 
the  New  England  milk  producers'  union,  of  which  J.  D. 
W.  French,  of  160  State  Street,  Boston,  Mass.,  is  the 
president.  The  Chicago  Milk  Shippers'  Association, 
which  began  business  May  1,  1891,  has  asimilar  purpose ; 
its  principal  executive  officer  is  F.  E.  Cox,  of  Nunda,  111. 
Philadelphia  shippers  are  also  getting  together.  Edwin 
Satterthwait,  Stall  300,  Twelfth  Street  Market,  Phila- 
delphia, and  S.  B.  Larzelere,  of  Doylestown,  Pa.,  are 
leaders  in  the  movement.  Milk  producers  and  shippers 
interested  should  apply  to  these  parties  for  further  in- 
formation about  theic  respective  methods  of  operation. 


CHAPTER  VII. 

COOPERATIVE   FIRE  INSURANCE. 

The  Old  Plan  too  Expensive. — Ordinary  fire  in- 
surance in  the  old  line  stock  companies  costs  too  much. 
Such  companies  in  the  United  States  and  Canada  receive 
in  the  aggregate  about  $100,000,000  annually  for  the 
insurance  they  carry.  The  average  aggregate  losses 
paid  by  them  during  the  past  six  years  have  been  only  a 
little  over  one-half  of  that  sum.  To  be  exact,  for  every 
$100  received  by  these  companies  for  premiums  or  fees 
for  carrying  insurance  they  have  paid  for  losses  on  the 
average  for  the  past  six  years  $58.30.  This  has  left  a 
balance  of  $46.70  out  of  every  $100  paid  to  the  compa- 
nies for  profits  and  to  defray  the  cost  of  conducting  the 
business.  This  statement  is  exclusive  of  the  business 
done  by  the  great  majority  of  mutual  and  cooperative 
insurance  companies  among  farmers.  >  Beyond  question 
the  system  is  wrong  which  compels  the  public  to  pay 
just  about  twice  what  insurance  actually  costs.  Forty- 
seven  per  cent  is  an  exorbitant  charge  for  the  expense 
and  profits  of  insurance.  Of  this,  fully  ten  per  cent  is 
the  average  present  return  on  the  capital  invested  (in 
former  years  the  profits  have  averaged  from  eleven  to  as 
high  as  fifteen  per  cent) ;  at  least  fifteen  per  cent  goes 
for  local  agents'  commissions,  and  the  remaining  twenty 
per  cent  pays  the  salaries,  rents  and  other  expenses  of 
the  business  as  now  conducted.  This  is  too  much  for 
the  public,  and  especially  for  farmers,  to  pay. 

We  are  not  alone  in  this  position.  The  Insurance 
Commissioners  of  several  States  have  repeatedly  urged 

159 


160  HOW  TO   COOPERATE. 

the  same  thing.  Particularly  is  this  true  of  the  Massa- 
chusetts insurance  reports.  As  Superintendent  Tarbox 
said  in  his  report  for  1885:  "The  too  great  cost  of 
insurance  challenges  the  attention  of  a  frugal  public. 
We  pay  too  much  for  insurance  protection.  Plainly,  it 
should  not — as  for  a  quarter  of  a  century  it  has — cost 
the  people  of  this  country  a  hundred  million  dollars  and 
more  to  protect  themselves  by  insurance  against  sixty 
million  dollars'  loss  of  property  by  fire." 

While  on  the  average,  forty-seven  per  cent  of  the* 
money  paid  the  old  line  companies  goes  into  profits  and 
expenses,  in  some  States  and  in  some  years  the  propor- 
tion of  profit  is  much  larger,  and  again  it  may  be  much 
smaller.  Occasionally  the  losses  iu  a  State  exceed  the 
premiums  paid  therein  in  the  same  year.  And  during 
the  past  year  or  two  some  companies  have  made  small 
profits  owing  to  the  extraordinfiry  fire  losses.  But  the 
general  statement  is  incontestable  that  insurance  costs 
altogether  too  much. 

Farm  and  Town  Mutual  Insurance  Companies. 
— The  exorbitant  cost  of  insurance  has  led  farmers  in 
some  States  to  organize  cooperative  or  mutual  compa- 
nies in  which  to  insure  themselves.  Pennsylvania  was 
the  first  State  to  adopt  this  plan,  and  some  of  her  farm 
mutuals  are  more  than  half  a  century  old.  Michigan 
has  had  a  good  system  of  farm  mutuals  in  operation  for 
twenty-five  years,  and  Minnesota,  Wisconsin,  lowu,  Illi- 
nois and  Ohio  have  since  adopted  it  or  something  simi- 
lar. The  practice  is  quite  extensive  also  in  New  York, 
New  Jersey  and  Maine,  but  in  most  other  States  it  is 
comparatively  unknown.  In  not  a  few  States  it  is  un- 
lawful to  practice  such  business.  In  Texas,  for  instance, 
some  mutuals  organized  to  insure  gin-houses  have  been 
closed  up  by  the  Attorney-General,  although  the  Patrons 
of  Husbandry  of  that  State  have  a  small  company  with 
$135,000  of  insurance  (1888).     In  Missouri,  a  mutual 


CoOPEilATfVE    FIRE    INSURANCE.  161 

can  do  business  only  when  it  has  a  guarantee  fund  of 
$50,000,  or  with  premium  notes  for  1100,000  with  thirty 
per  cent  thereof  paid  in  cash.  Louisiana  law  prohibits 
anything  like  cooperative  fire  insurance.  Dakota  re- 
quires a  capital  of  $100,000.  Utah  has  no  farm  mutu- 
als,  though  the  Mormons  have  a  system  of  mutual 
insurance.  Anything  like  farm  mutuals  is  compara- 
tively unknown  in  North  Carolina,  Virginia,  West  Vir- 
ginia, Tennessee,  Ehode  Island,  Colorado,  Alabama, 
Florida,  Georgia,  Indiana,  Idaho,  Indian  Territory, 
Kentucky,  Kansas,  Maryland,  Mississippi,  Montana, 
Nevada,  New  Mexico,  Oregon,  Washington  and  Wyo- 
ming. New  Hampshire  had  a  grange  fire  insurance 
company  some  years  ago  and  has  recently  revived  it. 
Vermont  has  a  similar  company,  but  it  is  not  patronized 
as  it  should  be.  The  Massachusetts  grange  has  one 
company  covering  the  whole  State,  and  so  has  Connecti- 
cut, the  law  of  both  States  requiring  $500,000  of  appli- 
cations before  a  company  can  issue  policies ;  these  two 
companies  are  operating  very  auspiciously.  Nebraska 
has  only  one  codpcrative  farm  company,  and  the  State 
laws  do  not  encourage  such.  Michigan  has  by  far  the 
best  code  of  laws  in  existence  regarding  farm  mutuals, 
which  should  be  adopted  in  every  State.  Under  such 
laws,  success  is  absolutely  certain,  witli  competent  and 
faithful  officers  and  a  prompt  paying  membership. 

Some  of  the  community  sects,  like  the  Shakers  and 
Mennonites,  have  insured  themselves  for  years.  Indeed, 
the  various  Mennonite.  mutuals  in  this  company  seem  to 
liave  sprung  from  tlie  Tiegenhoff  Fire  Insurance  Asso- 
ciation in  Prussia,  which  originated  in  1623,  and  has 
been  in  continuous  existence  ever  since.  The  coopera- 
tive idea  is  successfully  practiced  by  many  city  and  town 
mutuals,  being  equally  a])plicable  to  them. 

The  General  Principle  of  all  these  Mutuals  is  to 
insure  the  property  of  members  for  stated  periods,  exact- 
11 


163  HOW   TO   COOPERATE. 

ing  a  small  fee  only  in  advance  for  the  simple  expenses 
of  printing,  secretary's  services,  and  cost  of  examining 
risks,  also  a  note  for  a  certain  per  cent  of  the  amount  of 
the  policy  or  premium,  which  note  carries  no  interest 
and  is  payable  in  installments  as  demanded.  Whenever 
loss  occurs,  an  assessment  to  pay  it  is  levied  upon  these 
notes  pro  rata.  Thus  the  patrons  of  these  farm  mutuals 
pay  only  the  actual  losses  by  fire,  plus  a  moderate  sum 
for  actual  expenses.  Some  farm  mutuals  make  their 
fees  sufficient  to  accumulate  a  reserve  fund,  which  prop- 
erly administered  adds  much  to  their  stability.  This  is 
objected  to  by  others  as  liable  to  cause  extravagance  in 
management  or  losses  in  investments.  But  it  gives  the 
mutual  a  means  for  regulating  the  cost  of  insurance, 
thereby  making  one  five-year  policy  cost  about  the  same 
as  in  another  five  years.  This  is  more  equitable  for  the 
insured,  and  also  makes  it  a  greater  object  for  them  to 
renew  their  policies.  We  decidedly  approve  of  a  small 
reserve  fund,  and  would  make  the  fees  sufficient  to  accu- 
mulate it. 

Insurance  companies  on  this  general  plan  have  proved 
remarkably  successful,  greatly  reducing  the  cost  of  in- 
surance to  their  patrons  in  the  States  named,  as  will 
appear  from  the  following  facts  and  experiences,  which 
are  substantially  unchanged  to-day  :  It  is  believed  that 
the  average  rate  charged  in  1S89  for  insurance  on  farm 
property,  including  both  houses  and  barns,  was  at  least 
one  and  one-fourth  per  cent,  or  $12.50  per  $1000  for 
five  years  (equal  to  $2.50  per  year  on  each  $1000  of  in- 
surance), in  the  States  west  of  Pennsylvania  and  New 
York.  In  the  Eastern  States,  the  average  farm  rate  is 
assumed  to  be  one  per  cent,  or  $10  per  $1000  insurance 
for  five  years  (equal  to  $2  per  year  on  each  $1000  of 
insurance),  except  that  in  Maine  it  is  one  and  one-fourth 
to  one  and  one  half  per  cent.  Of  course,  higher  and 
lower  are  obtained,  but  the  following  estimate  errs,  if 
anything,  in  being  too  low  : 


COOPERATJVE  FIRE  INSURANCE. 


163 


Average  Cost  Per  Year  for  Each  $1000  Insur- 
ance— The  average  of  the  farm  mutuals  has  been  com- 
piled with  great  care  from  the  insurance  reports  of  the 
respective  States,  supplemented,  where  necessary,  by 
additional  data  collected  from  the  secretaries  of  compa- 
nies of  this  character,  to  whose  painstaking  reports  is 
due  much  of  the  value  of  this  chapter  as  an  exposition 
of  the  whole  subject  of  cooperative  insurance  among 
farmers.  The  total  earnings  show  the  amount  saved  on 
the  insurance  carried  by  the  mutuals ;  thus  a  gain  of 
11.01  per  81000  of  insurance  saved  $10,990  on  the 
$10,882,000  of  insurance  in  the  twenty-nine  Maine  mu- 
tuals, and  so  on : 

COST  OF  COOPERATIVE   AND   STOCK  INSURANCE. 


^1 


29 


77 


Cost  for  §1,000  Insurance  in 
one  year,  1887. 


Maine 

Connpcticnt . 

New  Yolk 

195  *Peiiiisy  1  vunia 

91  tOhio 

160  ,  Illinois 

72    Michigan 

101     Iowa 

152  I  Wisconsin  

55     Minnesota  

940    Totals  and  averages. 


t/5  a, 


So 


§2.50  4*1.49  §1.01 


2.00 

1.20 

2.00 

1.23 

2.00 

1..50 

2..50 

1.47 

2.50 

1.56 

2.50 

0.88 

2.50 

1.68 

2.50 

1.78 

2.50 

0.92 

0.80 
0.77 
0.50 
1.03 
0.94 
1.62 
0.82 
0.72 
1.58 


e  ss  s 
o-^  e  g 


c-2g3 
^    ft. 


$10, 

5, 

67, 

525, 
72, 
57. 

252, 
39, 
62, 
21 


,990  $10,1 

984  6,; 

314  87,- 

0001  105,( 

7321  70,( 


882,000 
373,306 
422,468 
OOO.OOy 
614,62tj 
357,755 
001,36.-, 
258,00!, 
299,70^ 
650,49): 
$2.35  $1.37  $0.98  $1,116,049;  $645,859,72" 


675   61, 
722  156,( 


7691 
296 

567 


*Of  the  195  Pennsylvania  mulnals,  many  insure  other  than  farm 
property;  tlie  estimate  is  based  on  the  experience  of  twenty  farm  mu- 
tuals fairly  selected.  At  least  one  fourth  of  the  $420,000,000  of  Pennsyl- 
vania mutual  insurance  is  believed  to  be  exclusively  on  farm  property. 

tThe  average  excludes  city,  live  stoclc  and  plate  glass  mutuals. 

Progress  of  the  System. — Since  the  foregoing  data 
were  collected  in  1887,  there  has  been  a  steady  increase 
in  the  number  of  cooperative  insurance  companies  and 
the  amount  of  insurance  carried  has  been  constantly 
increased.  Contrast  the  amount  at  risk  in  the  New 
York  mutuals  three  years  ago, — $87,422,468, — with  the 
following  statement  from  the  committee  on  cooperative 
fire  insurance  to  the  New  York  State  grange  in  Febru- 
ary, 1891 : 


164  HOW  TO  COOPERAIB. 

The  reports  from  companies  show  that  December  31, 
1890,  there  were  in  force  53,802  policies,  covering  risks 
to  the  amount  of  $101,102,812,— a  gain  of  about  $10,000,- 
000  since  the  report  of  1889,  indicating  a  healthy  condi- 
tion. The  amount  reported  for  expenses  for  the  last 
three  years  is  1122,537;  for  losses,  $250,274,  showing  a 
saving  of  about  fifty  per  cent  over  insurance  in  stock 
companies,  or  in  other  words  over  $100,000  per  year, 
which  is  no  insignificant  sum,  considering  the  stringent 
times  of  money  among  the  farmers  for  the  years  our 
report  covers.  But  a  still  greater  consideration  than 
any  financial  advantage  has  come  through  our  system  of 
cooperation.  Farmers  have  been  taught  self-reliance 
and  have  demonstrated  through  these  associations  that 
they  are  able  to  look  after  their  own  affairs  instead  of 
delegating  them  to  that  class  which  by  common  consent 
has  always  been  called  business  men.  Patrons  have 
shown  that  they  were  business  men  as  well  as  tillers  of 
the  soil.  Your  committee  would  also  call  your  attention 
to  the  fact  that  each  succeeding  year  demonstrates,  and 
more  clearly  proves,  that  in  every  county  where  the  insur- 
ance has  been  restricted  to  the  Order,  there  it  has  been  a 
great  source  of  strength  and  support  to  the  Grange. 
And  in  every  instance  in  which  it  has  been  allowed  to 
go  outside,  the  effect  has  been  to  demoralize  and  weaken 
the  Order.  Your  committee  would  further  report  that 
five  companies  have  been  organized  during  the  past  two 
years  and  now  show  risks  of  over  $2,000,000,  and  are  in 
a  very  healthy  condition.  The  committee  now,  as  one 
year  ago,  would  urge  upon  this  body  the  importance  of 
encouraging  these  organizations  by  every  possible  means, 
believing  that  they  are  strong  and  faithful  allies  of  the 
Grange," 


COOPEKATIVE  FIRE   INSURANCE.  165 

Cost  Per  Year  of  $i,ooo  of  Insurance. 


In  Stock  Companies. 

In  Farm  Mutuals. 

Maine 

Connecticut.. 
New  Yoik.... 
Pennsylvan'a 
Ohio 

^^MB 

Illinois 

Micliigan 

Wi.sconsin — 
Minnesota... 
Average 

H^HH^^^^^I 

The  Savings  of  Cooperative  Insurance. — Th( 
above  tables  make  a  flattering  showing  for  farm  mutuah 
for  a  single  year,  indicating  a  saving  by  940  cooperative 
companies  in  ten  States  of  over  one  million  dollan 
annually.  But  what  are  the  facts  in  a  long  period ! 
We  will  cite  from  two  States  whose  records  are  quitt 
complete  : 


Michigan  Farm  Mutuals. 


No.  of  companies... 
No.  of  members.... 

Ri.sks  in  force 

Assessments  levied 
Losses  paid 


1865.           1875. 

1880. 

61 

1887. 

24                  38 

7 

16,585 1          47.2.'>4 

76,016 

93,87 

$27,74.5,779  $92,204,349 

$129,812,108  $156,001 .36f 

27,48()|        1.57,917 

209,833            149,(i5 

20,345|        126,783 

188,662 

247,48 

166 


HOW  TO   COOPERATE. 


Illinois  District,  County  and  Township  Mutuals. 


No.  of  companies 

Risks  written  during  tlie  year. 

Risks  in  force  Dec.  31 

Expenditures  for  losses 

Total  expenditures 

Ver  cent  of   losses  to  risks  in 

force  Dec.  31 

Per  cent   of   expenditures    to 

risks  in  force  Dec.  31 


1873. 

1880. 

1887. 

30 

$3,497,990 

8,891,632 

15,930 

22,526 

134 

$9,177,095 

32,764,232 

19,859 

35,855 

160 

$14,277,158 

61,357,755 

68,130 

95,666 

18 

6 

11 

25 

11 

16 

Totals 
(1873-87, 

Incltisive). 

$i32',629',862 

515,578,997 

488,730 

723,475 

(Av.) 

9 
(Av.) 

14 


The  expenditures,  other  than  losses,  have  been  thirty- 
two  per  cent  of  the  total  paid  out  by  these  cooperative 
companies.  In  stock  companies,  from  forty  to  sixty  per 
cent  of  the  receipts  go  for  expenses  other  than  losses, 
averaging  forty-six  per  cent. 

The  Cost  in  the  Mutuals. — The  average  cost  for 
insurance  in  the  Michigan  mutuals  for  twenty-eight 
years  has  been  less  than  $1.50  per  $1,000  of  insurance 
per  annum;  in  the  Illinois  mutuals,  $1.40  per  year  for 
fifteen  years.  This  is  a  saving  of  from  thirty  to  sixty 
per  cent  or  more  over  the  rates  of  stock  companies  dur- 
ing the  same  period,  which  formerly  were  much  higher 
than  at  present  on  farm  property.  At  a  low  estimate 
the  farm  mutuals  have  saved  their  patrons  : 

In  Michigan,  in  twenty-eight  years $3,500,000 

In  Illinois,  in  fifteen  years 775,000 

Total  savings  in  two  States $4,275,000 

In  other  words,  to  have  insured  their  property  in  the 
old-line  companies  to  an  equal  amount  for  this  period 
would  have  cost  the  patrons  of  farm  mutuals  in  these 
two  States  over  four  and  a  quarter  millions  of  dollars 
more  than  they  have  had  to  pay.  If  all  farms  insured 
in  these  two  States  had  been  carried  in  farm  mutuals, 
the  savings  would  have  been  very  much  larger.  The 
average  savings  of  nearly  1,000  of  these  mutuals,  so 
graphically  given  on  the  preceding  page,  are  still  more 
suggestive. 


COOPEBATIVE   FIRE   INSUBANCE. 


1( 


The  conspicuous  facts  to  be  emphasized  are  that  aboi 
one  thousand  farm  mutual  companies  are  in  successf 
operation  in  t§n  States ;  second,  that  they  carry  insu 
ance  on  farm  property  to  the  amount  of  six  hundri 
and  fifty  millions  of  dollars ;  third,  that  this  insuran 
cost  the  farmers  one  million  dollars  a  year  less  than 
it  had  been  carried  in  the  old-line  companies  at  tl 
average   minimum  rates;    fourth,   that  this   enormo 


■^ssss.p>i^^:Xf 


Fig.  21.    Elevation  of  a  Whole  Milk  Receiving  Creamekv. 

annual  saving  is  the  rule  and  not  the  exception.  T 
experiences  of  the  past  four  years  further  confirm  the 
statements. 

The  Perils  of  Cooperative  Insurance. — But  the 
is  a  dark  as  well  as  a  bright  side  to  the  ])ictnre,  and 
candid  man  should  look  at  both.  In  a  few  cases  fan 
ers'  mutuals  have  failed.  An  instance  of  this  kii 
occurred  in  one  of  the  Eastern  States.  Tlie  conij)ai 
was  organized  twelve  years  ago  as  a  grange  comi)an 
No  policies  were  written  outside  of  the  Patrons  of  Hu 


168  HOW  TO  COOPERATE. 

bandry  for  several  years.  But  after  securing  what  good 
risks  could  be  obtained  in  the  Order  it  was  thought  best 
to  accept  selected  risks  from  outsiders^  to  increase  the 
amount  insured,  and  reduce  the  percentage  assessed  in 
case  of  loss.  This  was  not  an  unwise  step,  for  the  facts 
show  that  the  losses  by  fire  were  greater  in  proportion 
to  the  amount  insured  inside  of  the  Order  than  outside. 
The  insured  gave  a  premium  note  for  two  per  cent  of 
the  amount  of  the  policy.  The  nine  directors  were  the 
company's  agents.     One  of  them  writes: 

"After  several  years  of  prosperity  our  policies  increased 
to  more  than  $500,000.  They  were  written  in  the  finest 
farming  sections  of  the  State  and  great  care  was  exer- 
cised in  taking  only  the  best  farm  risks  and  at  not  more 
than  two-thirds  of  their  value.  No  losses  of  any  amount 
occurred  until  about  four  years  ago,  when  a  large  fire 
necessitated  a  large  assessment.  From  that  time  our 
fortunes  changed.  Fires  came — honest  fires,  not  over- 
insured — largely  within  the  Order  of  Patrons,  and  of 
course  assessments  followed,  until  we  found,  a  year  or 
two  since,  that  we  had  assessed  nearly  all  that  was  due 
on  the  premium  notes  so  that  a  fire  of  $2,000  would  take 
all  there  was  available.  Not  thinking  it  safe  to  continue 
business  with  so  small  a  margin  with  which  to  pay  losses, 
we  canceled  all  policies  after  making  au  assessment  to 
pay  all  demands.  The  average  cost  for  insurance  per 
year  while  the  company  existed  was  $3.49,  or  at  the  rate 
of  $17.45  for  $1,000  insurance  for  five  years,  while  the 
stock  rate  probably  would  not  exceed  $15  in  the  same 
time.  In  our  company  no  errors  were  committed. 
There  was  no  dishonesty  anywhere.  Our  directors  were 
farmers  of  strict  integrity,  good  judgment,  and  a  major- 
ity of  them  had  held  public  positions  of  trust  requiring 
business  qualifications.  We  had  as  good  farm  buildings 
as  can  be  found  in  the  State.  Care  was  exerci.ied  at 
every  point.     Why  we  met  with  reverses  I  cannot  answer. 


COOPERATIVE   FIRE   INSURATS"CE.  169 

Insurance  is  a  game  of  chance  to  a  certain  extent,  and 
no  calculations  can  be  made  with  any  degree  of  certainty. 
The  fact  is,  more  farm  buildings  are  being  burned  than 
formerly.  In  my  judgment,  no  company  can  live  long 
that  has  only  farm  risks.  Some  are  doing  well  now, 
but  stern  facts  lead  me  to  believe  that  their  foundation 
is  far  from  being  secure.  My  ardor  for  mutual  insur- 
ance, particularly  among  farmers,  has  somewhat  cooled, 
and  the  record  in  this  State  is  not  flattering  enough  to 
warrant  great  confidence  in  its  stability." 

One  or  two  other  mutuals  in  the  same  State  are  now 
languishing,  but  most  of  them  are  very  strong  and  popu- 
lar, and  are  saving  their  members  much  money  every 
year.  Some  of  the  most  enthusiastic  supporters  of  farm 
mutuals  are  in  this  very  State,  and  base  their  judgment 
on  twenty  to  thirty  years'  experience  in  their  own  mu- 
tual or  cooperative  companies. 

The  Mistakes  of  Cooperators. — We  should  be  der- 
elict to  our  readers'  interests,  however,  if  we  failed  to 
point  out  the  mistakes  from  which  not  a  few  farm  mutu- 
als have  suffered  in  a  long  and  often  costly  experience. 
Over-valuation  is  perhaps  the  greatest  curse  of  all  insur- 
ance, and  is  to  be  specially  guarded  against  in  coopera- 
tive farm  mutual  companies.  It  is  the  most  prolific 
cause  of  "spontaneous  combustion."  Combine  bad 
risks  with  over-insurance,  so  that  it  will  handsomely 
pay  the  insured  to  realize,  and  bad  losses  to  the  company 
are  sure  to  result.  No  policy  should  exceed  two-thirds 
of  the  actual  value  of  the  property,  so  that  the  loss  will 
be  at  least  one- third.  It  is  true  that  by  allowing  a 
larger  sum  than  the  local  mutual,  the  agents  of  the  stock 
companies  often  get  this  class  of  insurance.  They  pro- 
tect themselves  by  paying  only  the  actual  value  of  the 
property  when  it  burns.  But  a  farm  mutual  has  no 
business  taking  such  risks  at  all. 

The  Most  Careful  Inspection  of  the  property  to  be 
insured  is  the  first  thing  to  secure.     Nothing  pays  bet- 


170  HOW   TO    COOPERATE. 

ter.  Here  is  the  prime  safeguard  against  loss,  and  there- 
fore one  of  the  foundations  of  success.  No  personal, 
social  or  financial  relations  between  the  inspectors  and 
the  applicant  should  lead  a  company  to  insure  a  house 
so  constructed  or  occupied  that  its  chances  of  being 
burned  are  greater  than  usual.  The  policy  must  be  so 
strongly  framed  as  to  protect  honest  members  against 
incendiary  fires.  Practical  and  honest  adjusters  of  losses 
are  also  indispensable.  The  true  spirit  of  cooperation 
should  be  aimed  at,  so  that,  to  use  the  words  of  the 
North  Yarmouth,  Me.,  farm  mutual,  "when  we  have  a 
fire,  the  assessment  does  not  seem  like  paying  a  tax,  but 
is  more  like  a  subscription  to  help  an  unfortunate  neigh- 
bor." The  following  tersely  stated  causes  of  the  demise 
of  a  Tillage  mutual  are  enough  to  wreck  any  company, 
and  farmers'  mutuals  should  be  on  their  guard  against 
them.  "The  officers  were  men  of  no  practical  experi- 
ence in  business.  The  first  epidemic  of  fires  in  the  vil- 
lage broke  up  the  company.  It  insured  everything,  and 
had  quite  a  uniform  rate.  Its  management  showed  an 
entire  lack  of  knowledge  of  the  business.  It  was  no 
precedent  for  anybody.  Its  records  were  decidedly  de- 
fective. It  cost  as  much  as  stock  insurance  and  wasn't 
half  as  safe." 

Unbusinesslike  Management. — Too  large  a  sum  in 
one  exposure,  or  risk,  has  been  a  fertile  cause  of  losses. 
While  the  property  in  such  cases  may  not  be  over-insured, 
it  is  too  great  a  risk  for  one  company  to  take.  Some 
companies  have  also  erred  in  making  losses  payable  to 
the  mortgagee,  thus  adding  another  and  uncertain  ele- 
ment to  the  moral  hazard.  Failure  to  allow  for  depre- 
ciation in  the  value  of  buildings  is  a  common  cause  of 
over-insurance,  the  evil  increasing  each  year  that  the 
policy  runs.  "A  large  part  of  our  losses,"  writes  a 
manager,  "  have  been  second-class  buildings  well  covered 
by  insurance."     The  frequency  with  which  this  state- 


COOPEBATIVB  FIRE   INSURAKCE.  171 

ment  is  made  in  the  many  reports  on  which  this  chapter 
is  based  shows  the  necessity  of  emphasizing  this  point. 
It  is  mainly  for  this  reason  that  the  Pennsylvania  system 
of  perpetual  policies  is  a  wrong  one.  We  quote  further 
actual  experiences  of  great  value  to  all  interested  in  the 
practical  application  of  mutual  insurance  among  farmers. 

Says  the  manager  of  one  of  the  largest  Illinois  mutu- 
als,  which  is  now  quite  successful,  carrying  about  two 
millions  of  insurance : 

"The  farmers  who  started  the  company  were  success- 
ful in  finding  general  support,  but  made  a  great  many 
mistakes  owing  to  their  inexperience.  The  first  great 
mistake  was  in  not  regularly  organizing  under  the  State 
law.  Another  mistake  was  in  not  being  careful  enough 
in  taking  risks.  Another  error  was  the  rule  to  collect 
fifty  cents  on  one  hundred  dollars  for  the  first  five  years, 
and  nothing  thereafter  until  the  losses  and  expenses 
should  exceed  the  income ;  with  light  losses,  this  led  to 
a  large  surplus,  which  was  loaned  at  interest,  but  on 
poor  securities,  by  which  much  was  lost.  The  company 
had  to  reorganize  under  the  State  law  in  1883,  assuming 
the  risks  and  assets  and  partly  the  mistakes  of  the  old 
organization.  But  as  only  new  members  were  assessed, 
the  income  is  not  increased  every  year.  So  an  assess- 
ment was  ordered,  which  caused  some  dissatisfaction. 
The  company  also  paid  the  expense  of  re-insurance  at 
the  end  of  each  five  years,  which  amounted  to  nearly 
half  of  the  expenses,  and  afforded  no  income.  It  is  be- 
lieved that  the  company  has  done  right,  however,  in 
ordering  the  assessment,  so  as  to  have  money  enough  on 
hand  to  pay  losses  when  they  occur,  as  assessments  for 
losses  after  they  occur  sometimes  are  slow  in  being  col- 
lected and  make  dissatisfaction." 

Apropos  of  the  concluding  suggestion  above,  the  sec- 
retary of  one  of  the  many  successful  local  mutual  com- 
})anies  in  Minnesota  writes  :     *'One  of  our  mistakes  was 


in 


HOW  TO   COOPERATE. 


in  not  placing  the  membership  fee  higher  so  as  to  secure 
suflBcient  funds  to  enable  us  to  pay  losses  as  they  occur, 
thus  avoiding  the  delay  of  making  and  collecting  an 
assessment.  Our  fees  for  membership  were  placed  at  $1, 
and  a  policy  fee  of  $1  for  each  $1000  insured,  which  we 
have  increased  to  $1.50."    This  opinion  is  generally  con- 


Fio.  22.    Flook  Plan  of  Whole  Milk  Creamery. 


curred  in,  and  with  proper  management  has  everything 
to  commend  it.  Thus  Secretary  F.  A.  Allen,  of  the 
Androscoggin  Patrons'  Mutual,  one  of  the  Maine  com- 
panies with  one  and  a  half  millions  of  insurance,  testi- 
fies :  "Our  cash  premium  should  be  ten  per  cent  instead 
of  three,  as  at  present,  thus  saving  the  expense  of  a  large 
number  of  assessments!" 


COOPERATIVE   FIRE   INSURANCE.  173 

On  the  other  hand,  D.  Foglesonger,  of  the  Newbury 
(Pa.)  company,  says  :  "We  don't  keep  a  large  amount 
in  the  treasury  to  tempt  the  ofldcers,  a  mistake  which  I 
think  some  mutuals  have  made.  We  have  always  been 
able  to  pay  all  looses  promptly.  Perhaps  our  only  mis- 
take was  in  paying  some  losses  a  little  too  promptly,  and 
not  investigating  more  into  the  motives  of  the  parties 
wanting  insurance."  The  most  serious  mistake  of  the 
Lancaster  County  (Pa.)  company,  in  the  opinion  of  Sec- 
retary A.  V.  Newphes,  was  in  1878-9,  when  "our  com- 
pany had  a  debt  and  heavy  losses,  and  a  large  number 
of  insured  were  permitted  to  withdraw  without  paying 
any  part  of  the  debt  or  losses  during  the  life  of  their 
policies,  whereby  the  whole  burden  was  cast  on  those 
who  remained  loyal  to  the  company." 

Other  Experiences. — There  is  much  to  be  gained 
by  all  present  or  wonld-be  farm  mutuals  in  profiting  by 
the  experience  thus  freely  given.  But  it  should  be 
stated  that  this  includes  the  most  serious  mistakes  re- 
ported. Under  this  heading  the  following  is  a  fair  sam- 
ple of  many  reports  : 

L.  S.  Lichtenwollner,  Secretary  Farmers'  Union  Mu- 
tual, Trexlertown,  Pa.  :  "We  seldom  sue  the  few  mem- 
bers who  are  in  arrears.  Generally  they  have  five-year 
policies,  and  we  cancel  them  when  their  policies  have 
expired.     We  now  have  insured  $15,343,640." 

1.  P.  Sterret,  Secretary  of  the  Warren  (Me.)  Farmers' 
Mutual  :  "  The  only  mistake  we  made  was  in  not  organ- 
izing, twenty  years  sooner.  Our  experience  shows  that 
town  mutuals  are  very  favorable  for  the  insured,  while 
the  experience  of  mutuals  extending  over  large  territo- 
ries has  been  unfavorable.  It  has  cost  less  than  one- 
fourth  as  much  in  our  company  as  in  stock  companies. 
Our  company  being  small  by  reason  of  its  limited  terri- 
tory the  amount  taken  on  any  single  risk  is  also  small, 
not  exceeding  twelve  hundred  dollars,  yet  we  liave  iiloS, 
597  on  farm  property  in  this  small  town  alone." 


174  HOW  TO   COOPERATE. 

A.  J.  Sweezy,  Winnebago  County,  111.  :  "We  have 
never  had  any  litigation,  and  very  few  have  been  dilatory 
in  paying  assessments,  and  such  usually  drop  out  when 
their  insurance  expires.  Our  members  feel  a  mutual 
interest  and  usually  pay  assessments  as  promptly  as  they 
would  any  legal  notes.  The  average  cost  of  insurance 
for  the  past  ten  years  has  been  $1.35  per  $1,000  annu- 
ally, against  $2.50  and  more  in  stock  companies." 

J.  Schmelzer,  Olmstead  County,  Minn.  :  ''Our  com- 
pany is  confined  to  Germans.  It  was  started  in  1882,  in 
the  face  of  great  opposition  by  the  agents  of  stock  com- 
panies, who  told  all  sorts  of  lies  about  us.  Not  a  few 
believed  those  agents  and  mistrusted  their  real  friends, 
but  in  the  third  year  they  began  to  see  their  folly  and 
came  in  with  us,  so  that  we  now  have  $660,000  of  insur- 
ance, of  which  nearly  $200,000  was  written  last  year. 
Over  four  hundred  members  paid  their  first  assessment 
this  year,  and  the  cost  of  insurance  for  six  years  has  been 
only  four  dollars  and  twenty-five  cents,  or  an  average  of 
seventy-one  cents  per  annum  for  one  thousand  dollars." 

How  to  Organize  a  Cooperative  Fire  Insurance 
Company.— In  the  first  place,  two  or  three  individuals 
should  thoroughly  interest  themselves  in  the  subject. 
Send  to  your  State  Commissioner  of  Insurance  for  the 
insurance  laws  and  reports,  also  to  some  of  the  coopera- 
tive fire  insurance  companies  mentioned  in  the  Appen- 
dix, and  obtain  their  reports,  by-laws,  forms  of  policy, 
etc.  After  studying  these,  ask  for  precise  information 
desired  on  any  further  points  from  those  who  have  had 
successful  experience  in  this  line.  In  writing  for  this 
purpose,  always  inclose  stamps. 

A  little  effort  in  this  way  Avill  post  one  up  quite  thor- 
oughly on  the  subject,  when  the  matter  should  be  talked 
up  among  the  people  to  be  interested,  after  which  a 
meeting  may  be  called  and  the  matter  laid  before  them 
in  a  simple  and  direct  way  that  they  can  understand. 


COOPERATIVE   FIRE   INSURANCE.  175 

To  this  end  the  preceding  chapters  or  a  summary  of 
them  may  he  read  to  the  meeting.  This  meeting  should 
appoint  one  or  two  committees  composed  of  the  best 
informed  members  to  report  a  plan  of  organization 
and  management  at  an  adjourned  meeting,  the  date  of 
which  should  be  positively  fixed  so  as  to  avoid  delay  and 
give  people  confidence  that  the  affair  means  business. 
This  committee  should  obtain  from  the  State  Commis- 
sioner of  Insurance  full  particulars  about  the  State  laws 
and  advice  about  the  best  method  of  procedure;  and 
may  correspond  to  advantage  with  other  cooperatives 
enrolled  in  the  Appendix. 

After  the  preliminaries  of  a  plan  have  been  decided 
upon,  a  lawyer  should  be  employed  to  frame  the  details 
legally.  Great  care  should  be  exercised  in  this  respect 
to  start  right.  Comply  not  only  with  the  law,  but  take 
advantage  of  the  experience  of  other  companies  as  re- 
lated in  the  preceding  pages  and  in  their  reports.  The 
company  must  be  a  legally  organized  corporation,  estab- 
lished upon  a  thoroughly  business  basis, — not  a  mere 
voluntary  association  without  any  standing  in  the  eye  of 
the  law.  Adhere  strictly  to  this  principle  or  make  no 
attempt.  Many  a  mutual  has  failed  disastrously  because, 
after  doing  business  for  years,  it  was  found  that  the 
charter  and  by-laws  were  so  loosely  drawn  that  members 
could  not  be  compelled  to  pay  assessments.  The  charter 
and  by-laws  will  vary  according  to  the  legal  requirements 
of  the  different  States  and  local  necessities.  An  excel- 
lent form  of  by-laws  is  tluit  employed  by  the  Michigan 
farm  mutuals,  which  is  given  in  tiie  Appendix. 

Confidence  Must  be  Established  at  the  start  and 
constantly  maintained,  or  faihire  will  surely  result. 
Confidence  cannot  be  had  unless  every  member  appre- 
ciates that  insurance  involves  an  inviolable  legal  contract 
between  the  member  and  the  company ;  and  a  moral 
contract  of  self  interest  between  all  members  to  help 


176  HOW   TO   COOPERATE. 

each  other  by  care  to  reduce  danger  from  fire  to  a  mini- 
mum. Where  the  State  laws  require  a  large  amount  of 
risks  or  considerable  paid-up  capital  before  a  mutual  or 
cooperative  company  can  do  business,  the  work  of  organ- 
izing under  such  laws  is  more  complex.  But  where 
town  districts  or  county  mutuals  are  permitted,  as  is  the 
case  in  many  States,  it  is  a  very  simple  matter.  There 
are  many  advantages  in  confining  operations  to  a  reason- 
ably small  district,  where  the  insured  are  personally  ac- 
quainted, thus  avoiding  fraud  and  securing  economy, 
but  the  territory  must  be  large  enough  to  give  sufl&cient 
insurance  to  make  the  risk  light. 

Officers  and  Meetings. — Having  adopted  the  by- 
laws and  secured  a  charter  in  compliance  with  the  law, 
it  would  still  be  easy  to  go  wrong  by  choosing  inefficient 
officers.  Eesponsible  men  in  whom  the  public  have  con- 
fidence should  be  selected, — not  necessarily  highly  edu- 
cated, but  men  of  sou;nd  Judgment  and  a  reputation  for 
integrity  as  well  as  intelligence.  The  secretary  is  the 
most  important  officer,  as  he  keeps  all  the  records,  does 
all  the  correspondence,  and  all  the  money  passes  through 
his  hands.  He  should  be  a  man  (or  woman)  of  educa- 
tion, able  to  keep  the  books  and  accounts  accurately, 
thoroughly  honest  and  heartily  interested  in  cooperative 
insurance.     Such  men  can  be  found  in  every  locality. 

Frequent  meetings  of  the  directors  and  officers  are 
advised,  with  full  and  explicit  reports  to  members,  so 
that  every  one  may  know  just  where  every  dollar  goes  to. 
The  cooperative  principle  of  giving  every  member  full 
opportunity  to  know  the  entire  business  of  the  company 
should  be  heartily  recognized.  In  this  and  other  ways 
the  insured  will  maintain  their  direct  personal  interest, 
which  will  lead  them  to  constantly  recognize  that  they 
themselves  are  the  company.  Prompt  adjustment  of 
losses,  especially  of  small  losses,  does  much  to  maintain 
confidence.      The  inspectors  and  adjusters  should   be 


COOPERATIVE   EIRE   INSURAXCE.  177 

prompt  in  all  such  matters.  But  members  must  be 
equally  prompt  when  assessments  are  called  for. 

With  good  management  there  will  be  no  delay  in  col- 
lecting assessments,  and  they  will  be  very  infrequent. 
Never  borrow  money  to  pay  losses.  Cooperative  insur- 
ance, like  cooperative  distribution,  must  be  managed  on 
a  strictly  cash  basis.  Several  disastrous  failures  in  farm 
mutuals,  especially  in  the  West,  have  been  due  to  bor- 
rowing money  to  pay  losses  one  year,  hoping  that  next 
year's  income,  without  any  series  of  fires,  would  even 
the  thing  up  and  make  an  assessment  unnecessary. 

Live  Stock  Insurance. — The  difficulty  of  identify- 
ing insured  stock,  and  thus  preventing  fraud,  is  such 
that  cooperation  is  much  more  complicated  on  such 
insurance  than  on  real  property.  The  addresses  of  a 
few  mutuals  that  make  a  specialty  of  insuring  live  stock 
are  given  in  the  Appendix,  from  whom  more  particulars 
can  doubtless  be  obtained. 

Life  Insurance  is  practiced  more  or  less  cooperatively 
to  such  an  extent  by  existing  fraternal  and  mutual  socie- 
ties, and  is  so  much  more  complicated  and  governed  by 
special  laws  that  no  attempt  is  here  made  to  treat  it  ivi 
detail. 


12 


CHAPTER  VIII. 

COOPERATIVE   BANKING. 

Building  and  Loan  Associations  or  Cobperative 
Banks. — These  have  met  with  tremendous  success  in 
the  United  States.  Originating  in  Philadelphia,  they 
have  spread  to  most  of  the  larger  cities  of  the  Northern 
and  Western  States.  They  have  quite  largely  supplanted 
or  preceded  the  old-fashioned  savings  bank.  In  Penn- 
sylvania the  people  have  saved  upward  of  $60,000,000 
through  their  1,000  cooperative  banks,  and  miles  of  Phil- 
adelphia streets  have  been  built  up  by  the  same  agency. 
Nearly  100,000  homes  in  that  city  have  been  paid  for 
through  this  system.  Chicago  has  many  such  banks, 
with  over  $15,000,000  of  deposits.  Massachusetts  took 
up  the  idea  only  a  dozen  years  ago,  but  has  over  100 
cooperative  banks  already,  and  about  a  dozen  are  being 
organized  in  that  State  annually.  New  Jersey  has  250 
cooperative  banks,  with  $23,500,000  of  savings  up  to  1891. 
Michigan  has  200.  In  New  York  375  out  of  400  asso- 
ciations reported  to  the  State  banking  department  105,- 
000  members,  with  loans  of  over  $20,000,000,  while  the 
face  value  of  the  shares  subscribed  for  is  over  ten  times 
as  much,  and  their  receipts  in  1890  were  over  $14,- 
600,000.  New  York,  Ohio  and  Pennsylvania  at  least 
each  have  a  State  league  of  cooperative  banks  which 
have  been  instrumental  in  securing  wise  laws  to  protect 
cooperators  in  saving  and  to  foster  their  interests,  espe- 
cially by  exempting  from  taxation  the  shares  and  loans 
of  such  banks  or  building  societies.  Similar  leagues 
are  organizing  in  other  States. 

178 


COOPEBATIVE    BAN^KING.  179 

The  growth  of  the  local  cooperative  bank  is  best  shown 
by  the  fact  that  the  authorized  capital  of  an  incomplete 
list  of  such  enterprises,  started  between  April  1,  1890, 
and  May  1,  1891,  foots  up  the  enormous  sum  of  $500,- 
000,000.  The  average  authorized  capital  being  over 
$1,000,000  shows  that  about  400  cooperative  banks  are 
being  organized  annually  in  the  United  States.  This 
capital  is  usually  made  up  of  shares  of  $200  each,  paya- 
ble one  dollar  a  month,  so  that  but  a  fraction  of  the 
authorized  capital  (only  one  two-hundredth)  has  to  be 
paid  in  at  the  start. 

Possibilities  of  Cooperative  Savings. — ''Brad- 
street's"  is  authority  for  the  statement  that  the  aggre- 
gate resources  of  tlie  savings  associations  of  the  country 
are  nearly  sixty  per  cent  of  the  entire  assets  of  all  State, 
saving,  loan  and  trust  companies  and  private  banks  and 
bankers  from  which  reports  were  received  in  1890. 
Their  deposits  were  less  than  ten  per  cent  below  those 
of  the  national  banks,  and  were  more  than  twice  as  large 
as  the  total  capital  stock  of  the  national  banks.  With 
this  true  now,  when  ordinary  savings  banks  are  practi- 
cally confined  to  a  small  section  of  the  country  (only 
037  purely  mutual  savings  banks  being  represented,  of 
which  all  but  eleven  are  in  the  'New  England  and  Mid- 
dle States),  what  will  happen  when  the  new  form  of 
cooperative  savings  bank  gets  its  growth  throughout 
tlie  Union  ? 

Because  so  easily  organized  and  so  inexpensively  man- 
aged, the  cooi)erative  bank  is  specially  adapted  to  com- 
munities not  sufficiently  peopled  to  support  a  ''regular" 
bank.  As  W.  H.  Durock  says :  "  One  who  enters  an 
association,  having  for  its  mission  the  systematic  sav- 
ing of  so  much  money  periodically,  enters  a  confraternity 
in  which  he  stands  on  an  equality  with  every  other  man  ; 
he  is  not  a  client  of  the  institution,  he  is  part  of  it ;  he 
has  a  voice  and  a  vote,  and  is  expected  to  use  both  when 


180  HOW  TO   COOPERATE. 

occasion  requires;  he  shares  in  the  whole  profits;  and 
the  manner  in  which  those  profits  shall  be  divided,  the 
majority  may  determine  from  time  to  time ;  as  economi- 
cal management  aids  profits  very  appreciably,  he  helps 
in  the  work  and  keeps  expenses  down  ;  he  takes  a  pride 
in  his  own  association  and  brings  it  to  the  notice  of 
others ;  he  may  not  get  his  money  out  as  promptly  as  he 
would  in  a  bank,  but  he  never  suffers  any  by  the  neces- 
sary delay." 

How  the  New  System  Operates — The  building 
and  loan  association,  or  cooperative  bank,  is  nothing 
more  or  less  than  a  savings  bank.  It  differs  from  the 
institution  ordinarily  known  as  such  in  the  technical 
details  of  the  borrowing  and  lending  of  money.  Its 
depositors  agree  to  make  their  deposits  regularly  and  by 
what  is  called  a  purchase  of  shares,  indicating  how  large 
they  mean  these  deposits  to  be.  The  bank  lends  only 
to  depositors — lends  to  the  highest  bidder,  provided  the 
security  is  good,  and  secures  by  the  share  system  repay- 
ment on  the  installment  plan.  This  makes  it  both  easy 
and  compulsory  for  the  borrower  to  pay  up  his  loan. 
The  avowed  purpose  of  these  associations  is  to  aid  home 
building.  They  could  not  well  turn  their  investments 
in  other  directions  without  losing  much  of  that  which 
has  deservedly  attracted  the  popular  fancy.  Naturally 
their  success  is  greater  in  the  Central  and  Western 
States,  where  the  building  of  homes  is  more  active  than 
in  the  older  States. 

Even  if  the  regular  savings  banks  should  adopt  the 
cooperative  plan  of  receiving  deposits  and  making' loans, 
the  cooperative  bank  would  continue  its  superiority.  It 
is  conducted  in  the  main  by  people  who  give  it  their 
time  for  nothing,  or  ratber,  without  money  return. 
The  bank  meets  but  once  a  month  in  some  room  or  hall, 
where  settees  and  a  small  safe  are  all  the  necessary  furni- 
ture, and  therefore  saves  in  the  matter  of  rent  and  fix- 


COOPERATIVE   BANKIKQ.  181 

tures.  It  has  a  decided  hold  on  its  depositors  in  that 
they  really  control  and  manage  it.  The  people  feel  that 
the  ordinary  savings  bank  is  apart  from  and  above  them  ; 
they  suspect  its  directors  are  making  something  out  of 
it.  There  is  more  democracy  in  the  cooperative  bank, 
and  even  "Bradstreet's,"  the  representative  of  the  pre- 
vailing commercial  system,  admits  that,  *'in  these  re- 
spects the  newer  institution  is  more  admirable  than  the 
savings  bank,  and  there  have  been  few  instances  where 
the  trust  thus  put  in  the  people  by  each  other  has  been 
abused." 

The  Economy  of  Cobperation. — It  will  be  seen 
from  the  two  paragraphs  immediately  preceding  that  a 
cooperative  bank  can  be  managed  with  exceeding  great 
economy.  The  total  amount  paid  for  salaries,  rent  and 
other  expenses  by  fifty-two  local  associations  in  New 
York  was  1.8  per  cent  of  the  receipts,  some  doing  the 
business  at  an  expense  of  only  one-half  of  one  per  cent 
of  the  income.  In  New  Jersey  the  expenses  of  242  asso- 
ciations for  the  year  ended  June  30,  1891,  averaged  $384 
each,  of  which  $294  went  to  pay  for  salaried  officials. 
This  is  a  remarkably  good  showing  for  economical  man- 
agement, since  the  bnsiness  transactions  for  the  year 
averaged  nearly  1400,000  per  bank  and  the  net  assets 
averaged  nearly  $100,000  per  bank.  In  no  other  system 
of  handling  or  investing  money  are  the  expenses  reduced 
to  so  small  a  sum. 

The  Bank  Feature  of  Cooperative  Societies. — 
It  will  be  seen  that  the  cooperative  bank  or  savings  and 
building  association  has  no  functions  that  cannot  be 
equally  as  well  carried  out  by  the  cooperative  society  on 
the  Rochdale  plan.  Iti  fact,  many  of  the  English  socie- 
ties now  have  building  departments,  which  are  coi  - 
ducted  in  the  manner  set  forth  in  the  rules  of  the  Koch- 
dale  society  as  printed  in  the  Appendix.  Until  a  coope- 
rative store  or  society  builds  up  a  large  business,  however. 


182  HOW  TO  CO6PERATE. 

it  can  doubtless  employ  the  savings  of  its  members  more 
profitably  in  its  own  business.  The  more  the  members 
invest  their  savings  in  the  society,  the  greater  the  capi- 
tal and  the  more  it  can  do.  The  cooperative  store  is 
thus,  in  one  sense,  the  best  kind  of  a  savings  bank. 
Unless  cooperators  fully  understand  the  matter,  it  would 
be  best  to  operate  the  building  association  independently 
of  the  store,  though  the  two  can  be  readily  united  where 
State  laws  or  a  special  charter  permit. 

The  National  Associations  not  Indorsed. — These 
cooperative  banks  should  not  be  confounded  with  the 
so-called  ''national"  building  and  savings  fund  associa- 
tions. The  latter  we  do  not  recommend,  as  they  re- 
quire a  great  number  of  agents,  and  their  expenses  are 
more  than  one-fourth  of  their  income.  In  some  notori- 
ous instances,  the  greater  part  of  the  receipts  of  certain 
"nationals"  have  been  absorbed  in  salaries  for  the  pro- 
moters, and  what  money  was  left  was  loaned  to  the  same 
parties  or  their  friends,  who  failed  to  pay  and  tbe  con- 
cern "failed."  The  cooperative  bank  should  be  a  local 
affair  managed  by  members  directly,  and  in  this  way  its 
expenses  need  not  be  more  than  from  one  to  two  per 
cent  of  the  income,  or  even  less.  The  expenses  should 
be  met  by  a  small  annual  due,  instead  of  coming  out  of 
the  regular  payments. 

Not  wishing  to  unduly  prejudice  the  reader  against 
"nationals,"  of  which  there  are  now  (June,  1891)  200 
in  the  United  States,  we  add  the  argument  made  for 
them  by  their  organ — the  National  Building  and  Loan 
Herald :  "  The  primary  idea  of  the  national  association 
is  to  utilize  the  surplus  of  one  section,  where  interest 
rates  are  low,  to  build  up  another  section  where  money 
is  scarce  and  interest  rates  correspondingly  high.  The 
local  association  might  do  this  if  it  would  employ  agents 
to  sell  its  stock,  but  the  locals  have  not  as  yet  shown 
that    they  possess  the  necessary   meed  of    enterprise. 


co6peeative  banking.  183 

Many  locals  sell  a  good  deal  of  their  stock  abroad,  but 
they  make  their  loans  at  home  where  they  can  hold  their 
thumbs  on  them  and  see  that  the  realty  does  not  fluctu- 
ate in  yalue  or  get  up  in  the  night  and  slide  off.  The 
main  advantage  of  a  local  over  a  national  is  the  oppor- 
tunity to  'watch  the  risk.'  In  a  national  association 
the  risks  are  distributed  so  that  no  great  loss  could  occur 
from  any  other  contingency  than  the  total  destruction 
of  the  Western  Hemisphere.  It  has  been  persistently 
urged  that  the  conditions  which  have  contributed  to  the 
success  of  the  local  associations  furnish  no  criterion  of 
similar  success  for  the  nationals.  This  is  granted  in 
advance.  The  national  movement  meets  dissimilar  con- 
ditions and  must  carve  out  its  own  good  or  ill  fortune ; 
but  there  is  no  reason  why  the  nationals  should  not 
profit  by  the  experience  of  the  local  associations,  and 
avoid  their  blunders  as  well  as  emulate  their  successes. 
Experience  has  demonstrated  the  vulnerable  points  of 
attack  to  be  three  in  number  :  1,  The  opportunity  for 
irresponsible  and  unprincipled  men  to  engage  in  the 
business ;  2,  losses  incurred  from  loans  made  on  insuffi- 
cient security  or  from  depreciated  values ;  3,  the  expen- 
siveness  of  the  plan  as  a  permanent  obstacle  to  national 
success."  The  Herald  then  proceeds  to  answer  these 
objections  to  its  own  satisfaction. 

Another  Strong  Point  for  cooperative  banks  over 
the  old  line  savings  institution  lies  in  the  fact  that  the 
money  thus  accumulated  is  employed  by  the  working 
people  themselves  to  advance  their  own  interests,  either 
in  home  building  or  productive  effort  of  some  kind. 
On  the  other  hand,  the  deposits  made  by  the  working 
people  in  the  old  line  savings  banks  are  very  largely 
borrowed  by  business  men  and  corporations  and  used  to 
increase  the  business  and  profits  of  capital.  In  this  way 
the  working  people  furnish  money  to  the  capitalist 
instead  of  utilizing  their  savings  themselves. 


184  HOW  TO  co5peratb. 

The  Rent  Pays  for  the  Place. — We  by  no  means 
object  to  the  old  line  savings  bank,  nor  to  this  use  of  its 
funds,  which  has  done  much  to  build  up  the  industries 
and  manufactures  of  our  Eastern  States.  But  we  re- 
gard the  cooperative  bank  as  an  advanced  step  in  ena- 
bling workers,  in  city  or  country,  to  more  directly  bene- 
fit by  their  own  savings.  For  farmers,  as  well  as  city 
residents,  can  utilize  the  cooperative  bank  principle  to 
save  money  or  pay  their  debts.  The  payments  for  shares 
and  interest  can  be  made  quarterly  or  semi-annually,  to 
adapt  them  to  the  farmers'  most  convenient  time  for 
making  payments.  The  sums  paid  will  be  easy  to  meet ; 
the  principal  is  whittled  down  with  each  payment,  and 
the  loan  paid  ofiE  in  ten  or  twelve  years,  according  to  the 
rate  of  interest  received. 

By  this  system,  the  success  of  which  is  assured,  the 
rent  of  a  house  or  farm  pays  for  it  in  ten  or  a  dozen 
years.  This  system  enables  the  poor  man  to  own  his 
house  or  farm  instead  of  renting  it.  By  the  old  system 
the  many  pay  rent  for  the  benefit  of  the  few ;  through 
the  building  and  loan  association  the  many  combine 
together  to  put  the  rents  into  their  own  pockets,  and 
thus  wipe  out  their  indebtedness  in  rotation. 

How  to  Start  a  Bank. — As  in  organizing  any  othej 
cooperative  enterprise,  a  few  people  should  first  become 
thoroughly  acquainted  with  the  whole  subject  of  coop- 
erative banks  or  loan  associations.  This  special  phase  of 
associated  effort  is  treated  very  completely  in  Mr.  Dex- 
ter's  manual,  and  the  other  literature  referred  to  in  the 
Appendix,  which  should  be  consulted.  Correspond  also 
with  some  of  the  cooperative  banks  mentioned  in  the 
Appendix.  Carefully  look  up  the  law  in  your  own 
State  as  to  such  institutions,  changing  the  model  by-laws 
given  below  to  comply  with  such  laws. 

Here,  as  in  other  cooperative  enterprises,  take  care 
to  start  as  a  legally  incorporated  society  or  corporation. 


COftPEBATIVB   BAIS^KING.  186 

This  is  specially  advisable  with  so  important  a  matter 
as  a  bank  or  building  association.  After  having  got  a 
pretty  thorough  insight  into  the  scope  and  operation  of 
the  cooperative  bank,  the  matter  can  be  talked  up  in  a 
quiet  way  among  the  most  thrifty  and  substantial  work- 
ing men,  including  some  of  successful  business  experience 
and  established  standing.  When  a  few  such  men  have 
once  got  interested,  it  will  be  easy  to  get  out  a  good 
attendance  to  a  meeting  to  discuss  the  matter,  appoint 
committees  to  make  further  investigations  and  report  a 
definite  plan  of  organization.  The  same  rules  as  to 
character  and  efficiency  of  officers  hold  true  with  banks 
as  with  insurance  companies  or  cooperative  stores. 

Model  By-Laws. — The  following  are  the  by-laws  of 
the  Berean  cooperative  bank  and  building  and  loan  asso- 
ciation of  Philadelphia,  Pa.  They  were  prepared  by  a 
committee  of  experts  and  are  pronounced  a  model  in  the 
State  where  cooperative  banks  have  been  longest  estab- 
lished. They  contain  more  than  is  necessary,  perhaps, 
and  must  be  varied  to  suit  the  laws  of  other  States,  but 
fully  explain  the  business  of  these  societies : 

Section  1.  Name  and  Object.— The  name  of  this  association  shall  be 
called  "Tlie  Berean  Building  and  Loan  Association,"  and  shall  have 
for  its  object  the  saving  of  funds  from  monthly  payments  of  the  mem- 
bers, and  the  investment  thereof,  or  to  be  advanced  or  loaned  to  mem- 
bers desiring  to  borrow,  to  the  end  that  the  profits  arising  from  the 
business  tluis  transacted  shall,  with  tlie  monthly  payments,  largely 
reduce  the  number  of  months  required  to  make  each  share  worth  its 
par  value  of  two  hundred  dollars. 

Sec.  2.  Stockholders  and  Capital  Stock.— The  capital  stock  of  this 
association  shall  be  one  million  dollars,  and  consist  of  five  thousand 
shares,  of  the  par  value  of  two  hundred  dollars,  to  be  issued  in  one  or 
more  series,  as  the  board  of  directors  may  determine. 

Sec.  3.  Stockholders  of  the  association  shall  be  citizens  of  the  United 
States.  Minors  may  hold  shares  by  trustees,  and  women  in  their  own 
right. 

Section  4.  Every  stockholder  or  trustee  shall  sign  these  laws,  by 
which  he  or  she  Is  obliged  to  the  prompt  payment  of  the  monthly  dues, 
premiums,  interest  and  fines,  and  to  the  fulfilment  of  all  obligations 
Imposed. 

Sec.  5.  Working  Expenses.— Each  and  every  stockholder  shall  p.ay 
for  every  share  of  this  association  subscribed  for,  twenty-five  cents 


186  HOW   TO  COOPEllATE. 

entrance  fee,  and  shall  also  pay  at  each  annual  meeting  such  sum  (not 
excet'dlng  twenty-five  cents  per  share)  iis  shall  be  determined  by  the 
board  of  directors,  to  pay  tlie  working  expenses  of  the  association. 

Sec.  6.  Monthly  />»<es.— Each  stockholder,  for  each  share  of  stock  by 
him  or  her  held,  shall  pay  one  dollar  per  month  in  current  funds,  until 
the  series  with  which  he  or  she  is  connected  shall  have  accumulated 
real  assets  sufficient  to  divide  to  each  share  the  sum  of  two  hundred 
dollars  or  its  equivalent,  based  on  a  division  of  the  profits,  giving  each 
dollar  invested  a  like  per  cent  per  annum  for  the  time  of  investment. 

Sec.  7.  Fines.— Xx\y  stockholder  neglecting  or  refusing  to  pay  his  or 
her  monthly  dues,  interest  or  premiums,  as  the  same  shall  become 
due,  shall  pay  the  additional  sum  of  two  cents  monthly  on  each  dollar 
remaining  unpaid. 

Sec.  8.  Withdrawals. — Stockholders  who  have  not  received  loans 
m.-iy  withdraw  from  the  association  after  thirty  days'  notice  given  at 
a  monthly  meeting  to  the  board  of  directors.  They  shall  receive  the 
amount  actually  paid  in  as  dues,  less  all  fines  and  other  charges,  and 
after  the  expiration  of  one  year  from  the  issuing  of  the  series  in  which 
the  stock  is  held  they  shall  be  entitled  to  the  amount  of  their  payments 
as  dues,  with  such  part  of  the  profits  as  the  directoi's  may  allow.  Xot 
more  than  one-half  of  the  funds  in  the  treasury  shall  be  used  to  refund 
money  on  withdrawn  shares,  except  by  special  order  of  the  board  of 
directors. 

Sec.  9.  Loans  (amount  per  share).— Each  and  every  stocikholder  shall 
be  entitled  to  a  loan  of  two  hundred  dollars  for  each  and  every  share 
which  he  or  she  may  possess. 

See.  10.  If  the  funds  in  the  treasury  admit  of  a  loan,  the  money  shall 
be  offered  at  a  stated  meeting,  and  the  stockholder  who  offers  the 
highest  premium  shall  receive  the  loan. 

Sec.  11.  Premiums  (to  be  paid  monthly).— The  premium  in  all  cases 
for  priority  of  loan  shall  be  the  number  of  cents  per  share  each  month 
which  the  borrowing  stockholder  agrees  to  pay  Into  the  association, 
together  with  the  regular  dues,  interest,  etc. ;  and  all  bidding  shall  be 
done  openly  at  tlxe  stated  meetings  of  the  board  of  directors. 

Sec.  12.  Stock  Loans.— Any  member  may  have  an  advance  or  loan, 
without  real  estate  security,  to  the  amount  he  or  she  shall  have  actu- 
ally paid  in  as  dues  to  the  association. 

Sec.  13.  Collateral  Security.— For  each  advance  or  loan  of  two  hun- 
dred dollars  per  share  to  a  member,  at  least  one  share  of  stock  shall 
be  assigned  to  the  a.s.sociation  as  collateral  security. 

Sec.  14.  Limit  to  Bidding.— The  successful  bidder  may  take  the  loan 
for  one  or  more  shares  (not  exceeding  ten  shares  at  one  bid)  at  the 
same  premium,  but  he  may  continue  bidding  if  there  be  more  money 
to  sell.  If  there  be  not  sufficient  funds  in  the  treasury,  the  balance 
may  be  supplied  from  the  receipts  of  subsequent  meetings.  All  suc- 
cessful bidders  shall  immediately  submit  a  full  description  of  the 
property  offered  as  security,  and  such  other  information  as  shall  be 
required,  and  shall  sectire  the  repayment  of  the  said  loan,  with  legal 
Interest,  by  satisfactory  bond  and  mortgage  upon  real  estate  in  the 
city  of  Philadelphia,  and  with  a  policy  of  insurance  for  an  approved 
amount. 

Sec.  16.  Interest  and  Premlvms  to  he  Paid  Monthly.— The  interest  and 
premiums  on  all  loans  shall  be  paid  monthly  from  the  time  of  bidding 
for  the  same. 


COOPERATIVE   BANKING. 


187 


188  HOW  TO   COOPEKATE. 

Sec.  16.  Time  Allowed  to  Fur»ish  Spcuritij.—Iu  tl»e  event  of  a  success- 
ful bidder  failing  to  oiler  satisfactory  security  for  the  space  of  one 
month  from  the  date  of  purcha.se,  tlie  loan  shall  revert  to  the  associa- 
tion, and  he  or  she  sliall  be  charged  with  one  month's  interest  on  the 
loan,  and  all  expenses  attending  the  examination  of  titles,  searches 
and  writings. 

Sec.  17.  rover  to  Compel  Payments. — If  the  dues,  interest,  fines,  or 
monthly  premiums,  or  either,  which  the  stockholders  agree  to  pay  at 
the  time  of  purchasing  money  are  suffered  to  remain  unpaid  more 
than  six  months,  the  directors  may  compel  payment  of  principal, 
interest,  fines,  and  premiums  by  instituting  proceedings  on  the  bond 
and  mortgage,  or  otiierwise,  according  to  law. 

Sec.  18.  Forfeited  Shares.— The  shartss  of  any  stockholder  or  trustee 
who  shall  neglect  or  refuse  to  pay  his  or  her  monthly  dues  or  fines  for 
the  period  of  six  months,  may  be  declared  forfeited  by  the  board  of 
directors,  when  the  shares  shall  revert  to  the  association.  If  such 
member  has  not  received  a  loan  on  the  shares,  he  shall  be  entitled  to 
receive  out  of  the  first  unappropriated  money  in  the  treasury  the 
amount  of  dues  paid  into  the  association,  in  addition  to  the  profit 
allowed  withdrawing  shares  of  the  same  series,  after  deducting  all 
fines  and  charges  on  the  same. 

See.  19.  Chatu/e  of  Securities.— In  case  of  a  stockholder  wishing  to 
change  the  security  offered  for  his  or  her  loan,  he  or  she  may  do  so 
without  being  compelled  to  repay  the  money  to  the  association,  pro- 
viding the  directors  approve  of  the  change. 

Sec.  20.  Oiie  Series  Kept  Open.— the  directors  shall  keep  one  series 
open  at  all  times  for  borrowing  members,  and  in  case  a  borrower 
requires  a  loan  on  more  shares  than  were  owned  by  him  or  her  at  the 
time  of  bidding,  the  requisite  number  of  shares  shall  be  furnished 
him  or  her,  the  borrower  paying  all  back  dues  and  assessments  on 
such  shares. 

Sec.  21.  Sales  and  Snhsfitution  of  Securities. — Should  any  stockholder 
desire  to  sell  a  property  on  which  the  association  has  loaned  money, 
transferring  to  the  purchaser  his  right,  title  and  interest  in  the  loan 
granted  on  his  shares,  he  shall  be  at  liberty  to  do  so,  if  he  shall  first 
obtain  the  consent  of  the  directors  to  such  sale  or  transfer.  No  such 
sale  or  transfer  shall  be  made  until  all  dues,  interest  and  fines  to 
which  the  association  is  then  entitled,  shall  have  been  paid  ;  and  the 
conveyance  having  been  duly  executed  by  the  solicitor  of  the  associa- 
tion, the  purchaser  of  the  property  shall  thenceforth  become  a  mem- 
ber of  the  association,  with  all  the  rights,  privileges  and  liabilities  in 
respect  to  such  shares  of  the  member  to  whom  the  loan  was  first 
granted. 

Sec.  22.  Purchase  of  Property.— The  board  of  directors  shall  have 
power  to  purchase  at  any  sheriff's  or  other  judicial  sale,  or  at  any 
sale,  public  or  private,  any  real  estate  or  property  upon  which  the 
a.ssociation  may  have  or  hold  mortgage,  judgment,  lien  or  other 
incumbrance,  or  ground  rent,  when  the  interests  of  the  association 
require  It.  They  also  shall  have  power  to  sell,  convey,  lease  or  mort- 
gage at  plea.sure.  to  any  person  or  persons  whatsoever  any  property  of 
which  the  association  may  become  possessed. 

Sec.  23.  When  Mortgaxjes  May  he  Satisfied.— \>' hen  any  sale  shall  take 
place  of  a  property  mortgaged  to  the  association  the  board  of  directors 


OOOPEEATIVE  BANKING.  180 


shall  require  the  payment  of  all  dues,  interest,  fines  and  premiums 
and  charges  owing  to  the  association  at  the  time  of  said  sale,  before 
satisfying  the  bond  and  mortgage  against  the  property. 

Sec.  24.     Property  Committee   Must  Approve.— iio  security  shall  be* 
deemed  sufficient  until  it  has  been  examined  by  the  property  commit- 
tee of  directors  and  approved  by  a  quorum  of  tlie  board  of  directors. 

Sec.  25.  No  Loans  Outside  of  Philadelphia. — No  loans  shall  be  made 
on  property  outside  of  the  city  and  county  of  Philadelphia. 

Sec.  26.  Bate  of  Interest. — Tlie  interest  on  loans  shall  be  paid  monthly 
at  the  rate  of  one-half  of  one  per  cent  per  month. 

Sec.  27.  Unproductive  Funds. — In  case  the  funds  of  the  association 
should  remain  unproductive  for  one  montli  the  board  of  directors  may 
make  investments  of  the  same  in  real  estate,  United  States  bonds  or 
otherwise  :  Provided,  however,  that  no  such  investment  shall  be 
made  without  the  consent  of  at  least  two-thirds  of  the  whole  board  of 
directors  first  obtained  and  expressed  in  writing. 

Sec.  28.  Salary  and  JExpenses.— The  salary  of  the  secretary  shall  be 
fixed  by  the  board  of  directors  from  time  to  time  and  paid  monthly, 
and  all  other  expenses  for  books,  printing,  etc.,  can  only  be  made  with 
the  approval  of  the  board  of  directors. 

Sec.  29.  Loans  may  be  liepaid  in  ZMfcZete.— Stockholders  who  have 
received  one  or  more  loans  of  $200  of  this  association  can  refund  one 
or  more  of  the  same  at  any  time. 

Sec.  30.  Shares  Pledged  for  Security.— When  a  loan  is  repaid  the 
share  or  shares  originally  transferred  to  the  association  as  collateral 
security  may  be  transferred  to  said  stockholder,  or  may  be  witlidrawn 
in  the  same  manner  as  free  shares. 

Sec.  31.  Deceased  Members'  Stock. — Upon  the  death  of  a  stockholder, 
his  or  her  legal  representatives  may  assume  the  future  payments  on 
the  stock,  or  may  withdraw  the  same  as  other  shares  are  withdrawn. 

Sec.  32.  Reissue  of  Shares. — New  shares  of  stock  may  be  issued  in 
lieu  of  all  shares  withdrawn,  forfeited,  or  which  have  reverted  to  the 
association. 

Sec.  33.  Involuntary  With dratvals. -The  directors,  whenever  it  shall 
appear  necessary  to  make  a  reduction  of  the  shares  not  loaned  upon 
in  any  series  as  it  approaches  maturity,  may  by  a  two-third  vote  com- 
pel the  redemption  of  shares  in  the  series ;  but  such  redemption  shall 
be  made  by  calling  in  from  eacli  shareholder  in  tlie  series,  as  may  be 
necessai-y,  pro-rated  upon  the  number  he  or  she  may  hold. 

See.  34.  Officers  and  their  Dtdies.-The  officers  of  this  association 
shall  be  a  president,  vice-president,  treasurer,  secretary,  solicitor  and 
thirteen  directors,  who  must  all  be  stockholders,  and  wlio  shall  be 
elected  at  the  annual  meetings.  In  case  of  a  vacancy  occurring  in  any 
of  these  offices  by  death,  resignation  or  otherwise,  such  offices  so  vaca- 
ted shall  be  filled  by  the  board  of  directors  until  the  next  election. 
All  the  officers  shall  continue  in  office  until  their  successors  are  duly 
elected. 

Sec.  35.  President.— It  shall  be  the  duty  of  the  president  to  preside 
at  the  meetings  of  the  association  and  of  tlic  board  of  directors,  and 
to  sign  all  orders  on  the  treasurer  for  the  payment  of  money,  when 
ordered  by  the  board  of  directors,  and  to  perform  all  other  duties 
appertaining  to  his  office. 


190  HOW  TO   COOPEBATE. 


Sec.  86.  Vice-President.— It  shall  be  the  duty  of  the  vice-president  to 
assist  the  president  in  the  discharge  of  his  duties,  and  officiate  for  him 
in  his  absence. 

Sec.  37.  Treasurer.— It  shall  be  the  duty  of  the  treasurer  to  receive 
all  moneys  paid  into  the  association,  and  give  receipts  for  the  same 
to  the  secretary;  to  pay  all  orders  drawn  upon  the  treasurer  by  order 
of  the  board  of  directors,  when  signed  by  the  president  and  attested 
by  the  secretary,  and  none  other.  He  shall,  for  the  faithful  perform- 
ance of  his  duty,  give  mortgage  bond  or  other  security  to  the  satisfac- 
tion of  the  board  of  directors,  and  shall  renew  the  same  when  required 
to  do  so  by  the  board.  He  shall  receive  and  hold  in  trust  for  the  asso- 
ciation all  bonds,  mortgages,  and  policies  of  insurance,  etc.,  on  all 
property  on  which  money  is  loaned  by  the  association,  except  securi- 
ties given  by  himself,  which  shall  be  held  by  the  president.  It  shall 
be  his  duty,  when  empowered  by  the  board  of  directors,  to  give  release 
and  acquittance  for  all  sums  of  money  which  shall  be  paid  to  the 
association  upon  any  bond,  bill,  note,  mortgage,  or  other  security,  and, 
if  necessary,  acknowledge  satisfaction  of  the  same  on  record;  and  he 
shall,  at  the  expiration  of  his  term  of  service,  deliver  over  to  his  suc- 
cessor in  office  all  moneys,  books,  papers,  etc.,  belonging  to  the  asso- 
ciation that  may  be  in  his  possession. 

Sec.  38.  Secretary.— It  shall  be  the  duty  of  the  secretary  to  keep 
accurate  minutes  of  tlie  proceedings  of  the  association  and  of  the 
board  of  directors,  and  record  the  same  In  a  book  or  books  to  be  kept 
for  that  purpose.  He  shall  keep  accurate  accounts  with  all  the  stock- 
holders; attest  all  orders  drawn  on  the  treasurer  for  the  payment  of 
money  when  so  ordered  by  the  board  of  directors  and  signed  by  the 
president.  He  shall  notify  the  stockholders  of  the  annual  and  special 
meetings,  and  also  notify  the  directors  of  their  monthly  meetings,  at 
the  expense  of  the  association.  He  shall  have  in  charge  all  the  books 
and  papers  (except  bonds,  mortgages,  and  policies  of  insurance)  be- 
longing to  tlie  association,  and  deliver  the  same  to  his  successor  in 
office  at  least  ten  days  before  the  next  monthly  meeting.  He  shall  be 
prepared  at  all  times  to  Inform  stockholders  of  the  state  of  the  finan- 
cial affairs  of  the  association,  and  at  the  yearly  meetings  furnish  a 
detailed  statement  of  the  finances.  He  shall  keep  a  record  of  all  loans 
made  by  the  association  upon  property  where  there  is  a  prior  incum- 
brance, and  require  members  receiving  such  loans  to  produce  the 
receipts  for  the  Interest  on  such  piior  Incumbrances  every  six  months, 
and  within  thirty  days  after  such  Interest  may  be  due,  and  shall  notify 
the  board  of  directors  of  any  default  on  the  part  of  the  members 
thereof.  He  shall  receive  as  compensation  for  his  services  such  sums, 
payable  monthly,  as  the  board  of  directors  may  deem  proper. 

Sec.  39.  Board  of  Directors.— The  directors,  together  with  the  presi- 
dent, vice-president,  secretary,  solicitor  and  treasurer  shall  form  a 
board  of  directors.  It  shall  be  their  duty  to  meet  statedly  on  the 
fourth  Thursday  of  each  and  every  month,  at  such  places  as  they  or  a 
majority  of  them  shall  appoint,  for  the  purpose  of  receiving  from  the 
stockholders  their  monthly  diies,  interest,  premiums  and  fines,  and  to 
pay  the  same  int<^)  tlie  treasury;  loan  out  the  funds;  see  to  their  safe 
investment;  and  attend  to  the  financial  affairs  of  the  association  gen- 
erally. The  directors  shall  receive  no  compensation  for  their  services. 
Seven  members  of  the  board  shall  constitute  a  quorum  for  the  trans- 


COOPERATIVE   BANKING.  191 


action  of  business.  They  shall  make  all  laws  for  their  own  govern- 
ment not  inconsistent  with  the  charter  and  by-laws.  They  may 
appoint  a  competent  conveyancer  for  the  association,  whose  term  of 
service  shall  be  at  the  pleasure  of  the  board. 

Sec.  40.  Conveyancer. — Tlie  conveyancer  shall  examine  all  title  pa- 
pers, and  procure  the  necessary  searches  for  property  offered  to  the 
association  as  security  for  money  loaned  or  otherwise,  and  certify  the 
result  in  writing.  He  shall  prepare  all  bonds,  mortgages,  agreements, 
and  other  writings  of  a  legal  nature  to  be  given  or  taken  by  the  asso- 
ciation, and  shall  be  entitled  to  receive  from  the  party  dealing  with 
the  association  the  usual  customary  compensation.  All  disputes  as  to 
the  amount  of  his  charges  and  disbursements  shall  be  settled  by  the 
board  of  directors.  It  shall  also  be  the  duty  of  this  officer  to  examine 
tlie  descriptions  of  the  properties  advertised  to  be  sold  by  the  .sheriff, 
and  if  there  be  any  against  which  the  association  has  a  claim,  to  report 
the  same  to  the  board  of  directors  immediately.  He  shall  also  be 
required  to  attend  the  monthly  meetings  of  the  board  of  directors. 

Sec.  41.  Elections. — All  the  elections  of  stockholders  shall  be  by  bal- 
lot.   The  polls  shall  be  open  from  8  to  9.30  p.  m. 

Sec.  42.  Right  to  Vole. — Each  stockholder  who  is  personally  present 
at  an  election  has  the  right  to  cast  one  vote,  regardless  of  the  number 
of  shares  owned  by  said  stockholder.  Xo  member  shall  be  entitled  to 
vote  who  has  not  been  a  stockholder  at  least  one  month. 

Sec.  43.  .^Mdi^ors.— There  shall  be  elected  annually  from  among  the 
stockholders  (and  not  members  of  the  board  of  directors),  three  audi- 
tors, to  perform  the  duties  usually  devolving  upon  such  officers,  and 
to  serve  during  the  ensuing  year.  The  directors  shall  have  power  to 
reward  the  atiditors  for  their  service. 

Sec.  44.  Annual  Meetintjs. — The  annual  meetings  of  the  stockholders 
shall  be  held  on  the  fourth  Tliursday  of  Febraary,  in  each  and  every 
year,  at  such  place  as  the  board  of  directors  may  designate. 

Sec.  45.  Stated  Meetinf/s.— Stated  monthly  meetings  of  the  board  of 
directors  shall  be  held  on  the  fourth  Thursday  of  each  month,  at  8 
o'clock  p.  m.,  for  the  purpose  of  receiving  from  stockholders  the 
moneys  due  the  association,  loan  the  money  in  the  treasury,  and  trans- 
act all  other  necessary  business  relating  to  the  association.  These 
meetings  shall  be  open  to  the  stockholders,  and  the  minutes  of  the 
proceedings  of  the  board  of  directors  shall  be  open  to  their  inspectit)n. 

Sec.  46.  Notice  of  Meetimfs. — Notice  of  the  annual  and  special  meet- 
ings of  stockholders  shall  be  published  by  the  secretary  in  at  least  two 
of  the  daily  papers  of  the  city  of  Philadelphia.  Special  meetings 
shall  be  at  the  written  request  of  ten  members,  stating  the  time,  jilaoe 
and  object  of  such  meeting.  No  business  shall  be  transacted  at  special 
meetings,  except  tnat  for  which  the  meeting  was  called.  Fifteen 
members  shall  constitute  a  quorum  of  a  meeting  of  stockholders. 

Sec.  47.  Nominations. — At  the  stated  meeting  in  Jainiary  of  ea<!li 
year  nominations  for  officers  of  the  association  shall  be  made;  and  at 
the  election  to  be  held  on  the  succeo<ling  February,  none  but  persons 
nominated  at  the  said  January  meeting  shall  be  elig'ble  for  election. 
and  the  candidates  receiving  the  highest  inimber  of  votes  polled  shall 
be  declared  elected. 

Sec.  48.    Amendments.— Theae  laws  may  be  altered  or  amended  at  an 


192  HOW  TO   COOPERATE. 

annual  or  special  meeting  of  the  stockholders,  and  only  by  a  vote  of 
at  least  two-thirds  of  the  members  present;  Provided,  The  amendment 
or  alterations  sliall  have  been  submitted  in  writing,  and  entered  on 
the  minutes  one  month  previous  to  action  thereon. 

BANKING   FOK   FARMERS   BV    FARMERS. 

The  Grangers'  Bank  of  California  is  a  conspic- 
uous instance  of  what  farmers  can  accomplish.  For 
the  bank  supplies  a  want  which  is  to-day  felt  in  very 
many  agricultural  sections.  Indeed,  the  necessity  for 
such  a  bank  is  quite  as  great  in  many  parts  of  the  West 
and  South  as  was  the  case  in  California  fifteen  or  twenty 
years  ago.  At  that  time  exorbitant  interest  rates  were 
current,  farmers  could  not  secure  loans  on  their  wheat 
or  other  produce,  and  were  practically  at  the  mercy  of  a 
gang  of  speculators  provided  with  abundant  capital,  who 
fixed  prices  to  suit  themselves.  The  Grangers'  bank 
was  incorporated  under  the  State  laws,  under  the  super- 
vision of  the  State  banking  commissioners,  with  head- 
quarters at  San  Francisco,  and  an  authorized  capital  of 
11,000,000.  Its  success  has  been  so  great  and  the  value 
of  its  experience  so  conspicuous  that  we  append  the  lead- 
ing clause  in  its  original  prospectus  of  1874  : 

This  bank  is  organized  for  the  purpose  of  enabling  the  Patrons  of 
California  to  secure  to  themselves  such  advantages  in  obtaining  money 
for  use  in  the  agricultural  portions  of  the  State  upon  as  favorable 
terms  as  it  can  be  obtained  in  the  city  for  commercial  purposes, 
believing  that  the  landed  security  of  the  agriculturist  is  equal  to  if 
not  better  than  city  property  as  a  basis  of  credit,  and  at  tlie  same  time 
giving  people  of  every  class  an  opportunity  of  safely  and  profitably 
investing  their  money. 

How  the  Bank  has  Progressed.  —  Starting  with 
a  few  thousand  dollars,  the  entire  capital  of  11,000,000 
is  now  subscribed,  upon  which  seven  installments  of  ten 
per  cent  each  have  been  paid  Stockholders,  who  have 
availed  themselves  of  the  privilege  of  paying  up  in  full, 
with  the  reserve  fund  of  $52,000,  swell  the  actual  capi- 
tal to  over  1800,000.  How  handsomely  the  business  has 
paid  the  investors  will  be  appreciated  by  noting  that 
while  the  paid-in  capital  is  1763,000,  the  profits  paid 


COOPERATIVE   BANKING.  193 

back  in  dividends  amount  to  $675,000.  The  dividends 
paid  have  ranged  from  ten  to  seven  per  cent,  averaging 
for  the  entire  sixteen  years  eight  per  cent.  Fully  nine- 
tenths  of  the  stock  is  held  by  farmers  and  fruit- 
growers. About  this  proportion  is  represented  at  the 
annual  meetings.  The  utmost  harmony  evidently  pre- 
vails, as  the  present  directors  and  officers  were  unani- 
mously reelected  at  the  annual  meeting  in  January. 

Direct  Loans  to  Farmers. — The  policy  of  finan- 
cial assistance  directly  to  farmers,  or  their  accredited 
agents,  for  their  benefit,  as  stated  in  the  original  pros- 
pectus, has  been  practically  adhered  to  from  the  start. 
In  fact,  the  Grangers'  bank  deserves  the  great  credit  of 
having  inaugurated  the  system  of  making  advances  to 
farmers  on  their  grain  in  their  local  warehouses, — a  sys- 
tem that  of  late  years  has  also  been  applied  to  wine,  rai- 
sins, merchantable  fruits,  and  general  produce  of  an 
imperishable  nature.  This  system  once  inaugurated, 
every  bank  in  the  State  has  since  been  obliged  to  adopt 
it,  so  that  at  every  wayside  station  and  river  landing, 
where  there  is  a  properly  officered  warehouse,  the  farmer 
can  obtain  a  loan  when  his  grain  or  other  produce  is 
stored  therein.  This  enables  him  to  free  himself  of  his 
store  bills  and  other  indebtedness  he  may  have  incurred 
up  to  harvest.  It  also  places  him  in  a  position  to  dis- 
pose of  his  produce  when  and  how  he  may  deem  best, 
thus  rendering  him  independent  of  speculators. 

Early  in  its  career,  when  the  Grangers'  bank  was  mak- 
ing its  great  fight  against  speculators,  who  had  previ- 
ously controlled  the  produce  market,  it  assisted  farmers 
to  hold  their  wheat  until  the  ring  was  broken  and  prices 
were  restored.  It  is  not  too  much  to  say  that  in  this 
way  the  bank  has  saved  millions  of  dollars  to  the  farm- 
ers of  California. 

The  enabling  of  farmers  to  market  their  crops  to  the 
best  advantage   has  not  been  the   only  benefit   of  the 
13 

/ 


194  HOW   TO   COOPERATE. 

Grangers'  bank.  It  has  reduced  tlie  rate  of  interest  on 
farmers'  loans  to  six  or  nine  per  cent  per  annum,  accord- 
ing to  location,  amount,  and  risk,  whereas,  before  the 
Grangers'  bank  was  established,  farmers  had  to  pay  from 
twelve  to  thirty-six  per  cent  per  annum  for  accommoda- 
tion, and  it  was  scarce  at  that.  The  bank  has  also  been 
able  to  materially  assist  in  the  formation  of  granges  and 
the  organization  of  farmers'  cooperative  associations, 
which  have  almost  invariably  prospered  where  properly 
managed.  Its  private  market  reports  and  statistics  of 
supply,  demand,  prices,  and  rainfall  are  also  of  great 
usefulness  to  its  patrons. 

The  Losses  incurred  have  been  very  trifling.  What 
losses  were  made  were  mostly  in  the  course  of  general 
business,  incident  to  the  carrying  on  of  any  banking 
institution.  Mr.  Albert  Montpellier,  the  eflScient  cash- 
ier and  manager,  to  whom  we  are  indebted  for  the  accu- 
rate and  oflBcial  information  upon  which  our  remarks 
are  based,  adds:  *'I  mention  this  matter  of  losses 
because,  since  the  establishment  of  the  bank,  our  farm- 
ing community  has  gone  through  years  of  light  crops 
and  unremunerative  prices,  yet  in  spite  of  such  bad 
years  our  losses  have  been  no  larger  than  those  incident 
to  the  usual  run  of  banking  business.  Meanwhile  we 
have  paid  our  stockholders,  who  are  mostly  active  farm- 
ers, $675,000  in  dividends.  We  are  satisfied  with  the 
legitimacy  of  this  business  and  its  results." 

The  Principal  Business  of  the  bank  is  with  the 
country  directly  to  farmers  and  also  with  cooperative 
associations  and  grangers'  unions  which  are  established 
throughout  the  State.  The  bank  also  does  a  general 
business  with  country  storekeepers  and  commission  men 
who  handle  country  produce.  Where  cooperative  or 
grange  stores  do  not  exist,  the  bank  has  local  agents 
through  whom  farmers  can  get  loans  direct  from  the 
bank.     This  brings  the  facilities  of  the  Grangers'  bank 


COOPERATIVE   BANKING. 


195 


directly  to  the  farmer,  however  distant  he  may  be  from 
San  Francisco. 

The  Problem  Solved.  —  It  thus  appears  that  the 
Grangers'  bank  of  California  has  made  a  practical  suc- 
cess of  the  system  of  advances  to  farmers.  Because  so 
many  members  of  the  Farmers'  Alliance  are  now  asking 
the  government  to  do  this  work  for  them  through  loans 
of  new  issues  of  paper  money,  as  proposed  in  the  much- 
discussed  agricultural  sub-treasury  bill  and  land-loan 
proposition,  we  propose  to  explain  fully  the  methods  of 


Fig.  24.    Typical  Seal  of  a  Successful  Farmers'  Bank. 

the  Grangers'  bank,  the  success  of  which  demonstrates 
conclusively  that  the  farmers  can  do  this  business  for 
themselves  far  better  than  the  government  can  ever  do 
it  for  them. 

Mr.  Montpellier's  testimony  on  this  point  is  worth 
oceans  of  the  current  talk  for  and  against  the  govern- 
ment loan  schemes  because  of  his  success  in  showing 
how  farmers  themselves  can  solve  the  problem  without 
government  aid.     He  says  :  *'  I  do  not  believe  very  much 


196  HOW  TO  COOPERATE. 

in  government  advances  to  farmers.  The  farmers  will 
accomplish  more  good  by  acting  for  themselves,  seeking 
by  business-like  means  to  obtain  money  as  cheaply  as 
they  can,  besides  making  every  effort  to  get  the  most 
money  possible  for  their  products." 

On  the  other  hand,  it  should  be  added  that  the  Rus- 
sian government  has  adopted  the  system  of  advances  to 
farmers  originated  by  the  Grangers'  bank,  "with  results 
satisactory  to  the  authorities  and  farmers."  But  so  far 
as  we  can  learn,  the  Russian  system  is  based  on  advances 
of  existing  money  rather  than  on  new  issues  of  govern- 
ment paper,  as  the  sub-treasury  plan  proposes.  The 
management  of  this  loan  business  under  private  auspices, 
as  by  the  Grangers'  bank,  is  also  much  cheaper  and 
more  efficient  than  in  Russia, — an  autocratic  nation 
from  which  the  independent  citizens  of  a  free  republic 
have  comparatively  little  to  learn. 

How  the  Business  is  Done — A  State  law  pro- 
vides for  the  issuing  by  warehousemen  of  negotiable  or 
non-negotiable  receipts  for  produce  actually  stored 
therein.  This  law  is  printed  in  the  Appendix,  in  the 
paragraph  devoted  to  California  laws  bearing  on  corpo- 
rations. Like  statutes  exist  in  some  other  States,  or  can 
be  secured  from  the  Legislature.  This  legal  basis  is  nec- 
essary, but  this  form  of  credit  is  in  most  States  used  by 
brokers  and  dealers,  whereas  farmers  can  avail  them- 
selves of  it  equally  well.  In  making  a  loan  on  produce 
the  farmer  first  stores  his  produce  in  a  warehouse  and 
takes  a  receipt  for  it,  of  which  the  following  is  a  sample  : 

"  No.  598.  Grldley,  Cal.,  June  11, 1891.  Received  on  storage  from  Sam- 
uel Jones  for  account  of  Tlie  Grangers'  Bank  of  California  in  tlie  Grid- 
ley  warelionse,  the  following  described  merchandise,  deliverable  only 
on  return  of  this  receipt,  properly  indorsed,  and  payment  of  storage  at 
the  rate  of  twenty-five  cents  per  ton  for  eacli  of  the  first,  second,  and 
third  months,  and  free  for  the  balance  of  the  season  ending  June  1, 
1892.  This  warehouse  reserves  the  right  of  loading  the  grain  at  the 
usual  rate  of  fifteen  cents  per  ton.  All  necessary  resacking  is  at  own- 
er's expense,  and  dangers  from  fire  and  elements  at  owner's  risk. 
Description— Marks— S.  T.;  G.  B'k.    Number  of  sacks  (owner's  count)— 


COOPERATIVE   BANKING.  197 

5,700.  Weight  (lbs>— 798,000.  Description  in  full— fifty-seven  hundred 
sacks  of  wheat  weighing  seven  hundred  and  ninety-eight  thousand 
pounds. 

A.  D.  LoGAK  &  Co.,  by  L.  K.  Vaughan,  Manager." 

This  being  indorsed  by  Samuel  Jones  is  negotiable. 
The  agent  of  the  Grangers'  bank  at  Gridley  then  inves- 
tigates to  see  that  the  above  amount  of  wheat  is  in  store, 
giving  a  certificate  to  that  effect  as  follows : 

"  This  is  to  certify  that  I  have  called  at  the  Gridley  warehouse,  situ- 
ated at  Gridley,  Butte  county,  and  have  duly  taken  possession  in  the 
name  of  the  Grangers'  Bank  of  Caiifornia,  of  wheat,  in  sacks,  piled  and 
segregated  in  said  warehouse,  and  described  as  follows:  5,700  bags 
wheat  stored  by  Samuel  Jones,  marked  G.  B'k,  S.  T.  Dated  at  Gridley, 
June  14, 1891. 

L.  Robinson,  for  Grangers'  Bank  of  California." 

Mr.  Jones  also  has  to  insure  the  produce  and  make 
the  insurance  policy  payable  to  the  Grangers'  bank. 
(1)  This  policy,  (3)  the  warehouse  receipt,  (3)  the  cer- 
tificate of  possession  and  (4)  a  sample  of  the  wheat,  are 
then  sent  to  the  bank  with  (5)  the  farmer's  note,  and 
the  bank  sends  back  the  money.  The  farmer's  note  is 
in  this  form  : 

"  $7,000.  Gridley,  Gal.,  June  13, 1891.  On  demand,  after  date  for  value 
received,  I  promise  to  pay  to  the  order  of  the  Grangers'  Bank  of  Cali- 
fornia, at  the  office  of  the  bank  in  San  Francisco,  Seven  Thousand  Dol- 
lars, in  gold  coin  of  the  United  States,  with  interest  in  like  coin  from 
date  hereof,  at  the  rate  of  six  per  cent  per  annum  until  paid.  This 
note  is  secured  by  5,700  sacks  of  wheat  weighing  798,000  pounds,  stored 
in  A.  D.  Logan  &  Co.'s  grain  warehouse  at  Gridley,  Cal.,  as  per  ware- 
house Receipt  No.  598,  dated  June  11, 1891,  herewith  appended,  which 
the  Grangers'  Bank  or  assigns  do  hereby  agree  to  return  to  the  owner 
of  said  security,  or  order,  »ipon  payment  of  the  above  promissory  nolo, 
interest  due  thereon,  insurance  and  other  legal  charges.    'So.  29,201. 

(Signed)  SAMUEL  Jones." 

The  Extent  of  this  Business  has  now  assumed  very 
large  proportions.  It  extends  to  all  parts  of  the  State, 
and  the  bank  is  regarded  as  the  farmers'  best  friend.  Its 
control  has  been  kept  in  their  hands  and  its  affairs 
administered  in  their  interests.  The  business  shows 
most  excellent  management,  as  nppcars  from  the  follow- 
ing statement  of  the  bank's  condition  Dec.  31,  1890, 


198 


HOW  TO  COOPERATE. 


from  which  it  will  be  seen  that  loans  of  the  nature 
described  comprise  the  bulk  of  the  transactions  : 


RESOURCES. 

Time  loans  and  discounts 

$825,985  61 

Demand  loans  on  wheat 
and  otlier  tangible  secu- 
rities   1,239,004  36 

Real  Estate 32,877  39 

Office  furniture  and  safes      6,750  00 
Cash  on  hand 204,239  91 


Total $2,308,867  27 


LIABILITIES. 

Capital  paid  up $761,890  00 

Surplus  fund  ..$51,874  96 
Divid'd  No.  16..   45,713  40 

97,588  36 

Due  depositors 631,635  46 

Banks  and  Bankers  (on 
time) 917,743  45 


Total $2,308,857  27 


Three  years  before,  Dec.  31,  1877,  the  totals  were 
11,858,309.19.  The  increase  proves  the  substantial  suc- 
cess achieved. 

The  Patrons'  Cooperative  Bank  of  Olathe,  Kan- 
sas, an  offshoot  of  the  successful  Johnson  County 
Cooperative  Association,  described  in  Chapter  IV,  is  a 
similar  enterprise  on  a  much  smaller  scale.  It  confines 
its  business  to  the  immediate  locality,  has  light  expenses, 
pays  fair  dividends  on  capital,  and  has  been  useful  in 
reducing  interest  rates,  and  in  accommodating  farmers. 
Its  condition  Jan.  1,  1891,  was  thus  reported : 


RESOURCES. 

Loans  and  discounts $94,608  98 

Real    estate,  safe,    and 

fixtures 8,249  10 

Expenses  &  taxes  paid        1,766  20 

Overdrafts 136  19 

Siglit  Exc'nge.. $69,557  59 

Cash  on  hand..  24,570  48—  94,128  07 


LIABILITIES. 

Capital  stock  subscribed 

$75,000.00   of    which    is 

paid  in $  30,000  00 

Undivided  profits 5,170  10 

Deposits 163,718  44 


Total $198,888  64  I         Total $198,888  54 

THE   people's   banks    OR   CREDIT   UNIONS. 

The  Proper  Use  of  Credit. — Since  we  have  so  stren- 
uously insisted  upon  cash  dealings  in  cooperative  socie- 
ties, the  reader  will  be  at  first  surprised  to  find  us  writ- 
ing on  the  employment  of  credit.  Cash  dealings  and 
the  use  of  credit  should  not  be  confounded,  however. 
When  a  person  buys  an  article,  especially  of  a  cooperative 
society,  he  should  pay  for  it  in  cash.     This  completes 


COOPERATIVE   BANKING.  199 

the  transaction.  Since  all  patrons  do  the  same,  no  one 
is  unjustly  burdened  by  helping  to  carry  the  credit  or 
bad  bills  of  other  members.  But  since  many  people  do 
not  have  the  money  to  pay  spot  cash,  it  is  necessary  for 
them  to  borrow  it  to  make  cash  payments  possible.  By 
so  doing  the  person  who  requires  credit  pays  the  cost  of 
the  accommodation,  while,  by  the  ordinary  system  of 
trusting  customers  in  stores,  those  who  pay  their  bills 
have  to  "carry"  the  bad  payers.  Again,  if  one  has  to 
borrow  money  with  which  to  pay  his  bills  instead  of 
being  "trusted,"  it  will  usually  make  him  far  more  careful 
and  economical.  By  this  system,  moreover,  the  gains 
which  the  heretofore  "  trusted "  customer  will  make  by 
paying  cash  for  his  goods  will  usually  more  than  offset 
his  expense  for  interest  on  borrowed  money. 

By  this  plan  the  perils  of  credit  and  its  expensiveness 
will  be  reduced  to  a  minimum,  especially  if  the  system 
upon  which  loans  are  made  obliges  prompt  payments  in 
installments,  after  the  plan  of  the  building  associations. 
The  ordinary  wage  earner  and  small  farmer  with  com- 
paratively small  property  has  little  credit  upon  which  to 
borrow,  but  if  such  persons  unite  their  credit,  the  coope- 
ration will  not  only  assist  them  to  relieve  their  poverty 
but  will  prevent  poverty.  Since  credit  is  so  important 
a  factor — official  statistics  show  that  nearly  nine-tenths 
of  the  commerce  of  the  United  States  is  transacted  upon 
exchanges  of  credit  rather  than  payment  of  actual  money 
— it  is  vastly  important  that  the  common  people  should 
unite  to  enjoy  its  benefits.  Because  so  many  people 
have  abused  credit,  and  because  it  is  at  present  beyond 
the  means  of  the  masses,  is  no  argument  against  their 
cooperating  to  enjoy  its  advantages. 

As  the  celebrated  economist.  Prof.  Conrad,  of  Halle, 
wisely  points  out,  by  the  use  of  credit  capital  is  employed 
more  productively.  He  who  possesses  capital  but  is  una- 
ble to  make  use  of  it  transfers  it  to  another  for  compen- 


200  HOW   TO   COOPERATE. 

sation  to  the  benefit  of  both,  as  well  as  that  of  the  pub- 
lic economy.  Thus  farmers,  artisans  and  traders, 
although  unprovided  with  means  of  their  own,  may  by 
the  use  of  credit  obtain  capital  to  assist  them  in  their 
labors  without  sacrificing  their  independence.  This 
point  is  to  be  particularly  borne  in  mind  as  of  special 
weight  in  judging  the  People's  Banks  or  Credit  Unions 
described  hereafter.  Credit  is  thus  of  importance  in 
avoiding  that  separation  of  capital  and  labor  which 
excites  so  much  bad  feeling  and  forebodes  so  much  dan- 
ger. Credit  gathers  together  the  smallest  sums,  which 
otherwise  could  not  be  profitably  invested,  and  employs 
them  at  a  profit.  This  concentrates  capital,  but  its 
returns  are  disseminated  among  the  people.  The  possi- 
bility of  employing  every  sum,  however  small,  is  a  great 
incentive  to  saving.  Above  all,  credit  binds  together 
the  interests  of  those  having  dealings  with  one  another, 
making  it  to  the  interest  of  each  to  show  himself  worthy 
of  the  trust. 

The  matter  is  well  summed  up  by  Prof.  Kichard  T. 
Ely,  in  his  article  on  German  cooperative  credit  unions, 
in  the  Atlantic  Monthly  for  February,  1881,  when  he 
says :  "Capital,  when  obtained  under  favorable  circum- 
stances, yields  a  larger  return  than  the  interest.  Were 
it  otherwise,  borrowing,  except  in  case  of  special  need 
and  distress,  would  cease.  The  prudent  and  skillful 
worker,  who  by  cooperation  can  command  credit,  is  thus 
enabled  to  obtain  besides  his  wages  a  surplus  from  the 
use  of  the  capital.  Credit  well  used  is  therefore  eco- 
nomically as  productive  as  a  favorable  climate  or  a  high 
education  of  the  people." 

The  Extent  of  People's  Banks — The  credit  unions 
— so  successful  in  Germany  and  Italy — afford  the  best 
model.  It  would  seem  that  our  cooperative  banks  or 
building  associations  might  serve  the  same  purpose  by 
slightly  modifying  their  rules  and  methods.     German 


COOPEBATIVE   BANKING.  201 

experience,  however,  shows  that  loans  on  personal  secu- 
rity should  not  be  attempted  by  institutions  of  this  class, 
emphasizing  what  is  true  in  America,  that  the  old-line 
savings  bank  or  the  cooperative  building  association  does 
best  to  confine  itself  to  real  estate  loans,  leaving  to 
national  and  private  banks,  and  to  the  people's  banks 
that  we  hope  to  see  established,  the  business  of  loaning 
on  personal  security. 

The  credit  union,  or  people's  bank,  in  Europe  is 
almost  as  old  as  the  Rochdale  system  of  distributive 
cooperation  in  England,  though  unlike  the  latter  it  has 
as  yet  secured  no  foothold  in  this  country.  **It  enables 
its  members  to  obtain  at  any  moment  ready  money  in 
amount  corresponding  to  their  position,  their  property, 
the  business  they  do,  etc.  The  profits  of  money-dealing, 
at  present  a  monopoly  of  capitalists,  flow  into  the  pock- 
ets of  the  cooperators  and  assist  them  in  the  formation 
of  a  capital  of  their  own."  Above  all,  the  people's  bank 
saves  the  high  interest  now  charged  by  the  pawn  shops 
and  private  brokers  for  loans  on  the  personal  security 
and  chattel  mortgages  of  people  in  humble  circum- 
stances, the  prevalent  rate  on  such  loans  to  poor  people 
being  from  one  to  five  per  cent  a  month,  even  in  finan- 
cial centers  like  New  York,  Chicago,  New  Orleans  and 
San  Francisco. 

These  credit  unions  owe  their  origin  to  Dr.  Schulze- 
Delitsch,  and  now  number  nearly  7,000  in  Germany 
alone.  The  returns  from  1,002  of  the  typical  credit 
unions,  for  the  year  ended  May  1,  1890,  showed  nearly 
half  a  million  members,  deposits  exceeding  $133,000,- 
000,  and  over  $360,000,000  of  authorized  loans.  Thus 
the  deposits  of  only  one-seventh  in  number  of  the  Ger- 
man cooperative  banks  equal,  if  they  do  not  exceed,  the 
deposits  of  the  three  greatest  banks  of  the  world — the 
Bank  of  England,  the  Bank  of  France  and  the  Bank  of 
Germany. 


208  HOW  TO   COdPEBATB. 

Marvellous  as  this  showing  is  for  cooperative  savings 
and  credit  among  the  masses,  the  averages  of  the  thou- 
sand banks  reported  are  still  more  instructive.  Their 
capital  averaged  $133,000,  or  1735  for  each  of  their  490 
members  ;  loans,  1360,000  ;  expenses,  $1,400,  and  losses, 
$240  per  bank.  The  interest  received  averaged  five  and 
one-third  per  cent,  expenses  one  per  cent,  reserves 
and  charities  one  per  cent,  leaving  three  and  one-third 
per  cent  net  earnings  paid  to  shareholders — equivalent  to 
five  to  seven  per  cent  net  in  various  parts  of  the  United 
States. 

Thus  the  banks  reward  investors,  while  bringing  the 
advantages  of  credit  within  the  reach  of  the  masses. 
OflBcial  returns  indicate  that  about  one-third  of  the 
members  (who  are  the  patrons)  of  these  credit  unions  are 
farmers,  an  equal  number  are  artisans  or  independent 
workmen,  and  the  rest  are  corporations  or  other  classes. 

How  the  Banks  are  Operated. — Since  their  object 
is  to  obtain  credit  for  people,  most  of  whom  can  give 
only  personal  security,  each  member  of  the  bank  is 
legally  liable  for  its  debts  to  the  full  extent  of  his  ability 
to  pay.  This  is  in  direct  contrast  to  the  limited  liabil- 
ity feature  of  American  cooperative  and  joint-stock  soci- 
eties, but  in  Germany  is  regarded  as  the  keynote  to  suc- 
cess, because  it  insures  increased  vigilance  on  the  part  of 
members  in  securing  the  best  management.  The  new 
cooperative  law  of  1889  permits  limited  liability,  but 
only  a  fraction  of  the  German  societies  have  adopted  it. 
This  law  carefully  regulates  the  conduct  and  inspection 
of  banks  and  other  societies.  The  principles  on  which 
the  people's  banks  are  founded  are  thus  stated  by 
Schulze-Delitsh  : 

1.  The  loan  seekers  are  themselves  the  managers  of  the  institution 
established  for  the  satisfaction  of  their  needs,  and  share  the  risk  and 
the  profit. 

2.  The  transactions  of  the  association  are  based  throughout  on  busi- 
ness principles;  the  fund  of  the  association  pays  to  the  creditors,  and 
the  loan  takers  pay  to  the  fund  of  the  association  bank  Interest  and 


COOPERATIVE   BANKING.  203 

commission,  according  to  tlie  rates  in  the  money  market.  The  mana- 
gers, especially  those  who  have  charge  of  the  funds,  receive  remuner- 
ation according  to  their  services. 

3.  By  full  payment,  once  for  all,  or  by  small  continuous  contribu- 
tions on  the  part  of  the  members,  shares  in  the  capital  of  tlie  associa- 
tion are  formed,  according  to  the  amount  of  which  the  profit  is  divided 
and  placed  to  their  credit  till  the  full  normal  sum  is  reached,  by  which 
means  an  ever-growing  capital  of  its  own  is  acquired  for  the  business 
of  the  association. 

4.  By  the  entrance  fees  of  members  and  by  reservation  of  shares  a 
common  reserve  fund  is  accumulated. 

5.  Sums  further  necessary  for  the  complete  carrying  on  of  the  busi- 
ness are  borrowed  on  the  common  credit  and  security  of  all  the 
members. 

6.  The  number  of  members  is  unlimited.  Entrance  is  open  to  all 
who  satisfy  the  requirements  of  the  statutes,  and  it  is  free  to  any  one 
to  cease  to  be  a  member  after  giving  due  notice. 

Members  and  Management.  —  The  bank  must 
start  with  at  least  seven  members,  who  hold  one  share 
each,  upon  which  at  least  ten  per  cent  must  be  paid  in. 
Each  member  has  but  one  vote,  and  proxies  are  not 
allowed,  except  that  women  can  give  proxies.  Beiii2^ 
founded  on  the  principle  of  self-help,  and  in  no  sense 
charitable  institutions,  membership  is  confined  to  those 
who  can  pay  each  month  even  a  small  sum  on  their  shares. 
This  indicates  a  person's  ability  to  make  use  of  credit, 
help  himself  by  it  and  pay  his  loan  when  due.  Appli- 
cants for  membership  are  passed  upon  by  the  directors, 
and  may  appeal  to  the  shareholders.  This  preserves 
the  cooperative  idea  of  maintaining  the  members' 
authority  and  power  over  the  managing  board. 

The  government  is  vested  in  all  the  shareholders,  who 
elect  a  supervising  council  and  a  board  of  directors. 
The  latter  choose  an  executive  committee  consisting  of 
one  or  more  of  their  number  and  the  cashier.  The  dis- 
count committee  consists  of  the  supervisors  and  at  least 
fifteen  other  members,  who  are  nominated  by  the  share- 
holders at  the  quarterly  meetings.  Three  arbitrators 
for  the  settlement  of  disputes  are  also  elected.  The 
directors  conduct  the  business  and  with  their  employes 
are    heavily  bonded     and    pecuniarily  and    criminally 


%Qi  HOW   TO  COOPERATE. 

responsible  for  all  their  faults.  The  supervising  coun- 
cil is  equally  responsible,  having  oversight  of  the  direc- 
tors, with  power  of  suspension.  The  supervisors  can 
also  call  a  meeting  of  shareholders  that  has  full  power 
to  revoke  a  directors'  election,  suspend  or  expel  members 
under  certain  restrictions,  limit  members'  payments, 
amount  of  loans,  etc. 

Monthly,  quarterly,  and  annual  reports  are  made. 
Interest  is  paid  on  deposits  and  other  features  usual  to 
the  banking  business  are  adopted.  The  credit  union 
aims  to  accumulate  a  substantial  share  capital  and 
encourages  its  members  to  carry  their  dividends  to  the 
credit  of  their  shares.  This  and  the  unlimited  liability 
of  principal  gives  the  union  credit  with  which  to  bor- 
row from  regular  banks  money  required  for  its  members. 
Great  importance  is  attached  to  the  reserve  fund,  which 
accumulates  from  entrance  fees  and  from  certain  propor- 
tions of  the  earnings.  The  larger  this  reserve  fund  the 
greater  the  ability  of  the  bank  to  borrow  money,  the 
profits  on  which  when  re-loaned  to  its  patrons  are  divi- 
ded among  the  shareholders,  making  the  dividends 
larger.  Losses  and  profits  are  divided  among  the  share- 
holders in  proportion  to  the  shares  which  they  own, 
according  to  the  amount  of  money  actually  paid  on  the 
same. 

Loans  and  their  Privileges.  —  Loans  are  usually 
made  for  three  months  only.  The  first  consideration  is 
the  solvency  of  the  borrower,  which  depends  upon  his 
financial  position,  his  moral  character,  and  his  business 
capacity,  which  are  usually  readily  determined  from 
inquiry  of  other  members.  One  or  two  indorsements  are 
also  required.  These  Dr.  Schulze  calls  the  keystone  in 
the  organization  of  personal  credit,  and  in  itself  consti- 
tutes the  sole  responsible  guarantee  of  the  solvency  of 
the  debtor,  and  is  the  usual  practice  with  regular 
banks.    "Nothing better  than  these  indorsements  assure 


COOPEEATIVE  BANKING.  205 

to  a  society  an  exact  idea  of  the  solvency  of  its  debtors, 
and  in  no  way  can  it  better  exercise  control  over  their 
position  or  possible  changes  therein.  Worthy  and  capa- 
ble artisans  and  farmers  who  have  real  need  of  loans  will 
never  fail  to  find  indorsers,  such  favors  being  recipro- 
cal." This  idea  has  been  carried  to  such  an  extent 
that  it  has  become  the  point  of  honor  with  members  of 
the  German  banks  that  nothing,  is  more  disgraceful  than 
to  cause  loss  to  a  comrade  who  has  served  for  one's 
security. 

Loans  are  also  made  on  bills  of  exchange  and  other 
acceptable  collateral,  and  also  on  deposits  or  "on 
account."  Notice  of  withdrawal  of  deposits  is  required, 
so  the  use  of  checks  among  the  members  is  not  common. 
This  feature  might  be  modified  to  better  accommodate 
the  masses.  Directors  or  employes  cannot  borrow 
money  for  themselves,  and  must  consult  the  supervisors 
in  all  cases  of  doubtful  security.  Loans  are  made  only 
to  those  who  use  the  money  to  assist  in  gaining  a  living 
by  honest  labor,  every  feature  of  speculation  being  scru- 
pulously avoided.  Real  estate  loans  are  not  made 
because  of  the  time  and  expense  to  realize  on  them. 
Since  the  unions  borrow  on  short  time  much  of  the  funds 
they  lend,  they  must  have  quickly  available  security, 
which  is  obtained  as  above  described.  In  addition  to 
this  banking  business,  the  people's  bank  will  collect 
debts  due  to  its  members,  thus  giving  the  single  mem- 
ber the  moral  and  legal  power  of  a  moneyed  institution. 
It  will  also  buy  and  sell  public  stocks  and  other  perso- 
nal property  for  its  members,  and  may  keep  and  admin- 
ister property  and  estates,  after  the  plan  of  our  Ameri- 
can safe  deposit  and  trust  companies.  The  union  thus 
acts  for  the  poor  man  as  his  business  friend,  adviser  and 
agent — a  savings  bank  as  well  as  a  lender. 

How  to  Start  a  People's  Bank. — It  will  be  seen 
that  these  institutions  are  much  wider  in  their  scope. 


206  HOW  TO   COOPERATE. 

more  elastic  and  useful,  besides  doing  a  work  that  the 
ordinary  cooperative  bank  or  building  association  can- 
not well  undertake.  It  is  equally  adapted  to  city  and 
country,  it  is  easily  managed  at  small  expense,  honesty 
and  carefulness  being  the  main  requisites  in  the  officers. 
As  the  amounts  handled  would  be  small,  so  the  risk  of 
losses  by  theft  or  carelessness  would  be  light.  Hence, 
there  is  hardly  a  community  that  does  not  possess  one  or 
more  men  competent  to  run  such  a  bank  with  the  assis- 
tance of  its  dii-jctors. 

To  start  such  a  bank  two  or  three  men  should  make  a 
thorough  study  of  it,  drawing  up  a  code  of  by-laws 
which  may  be  a  modification  based  on  the  by-laws  of  the 
Grangers'  bank  of  California  and  those  of  the  various 
cooperative  societies.  Here,  as  in  organizing  other 
cooperative  societies,  great  care  should  be  taken  to  com- 
ply with  the  law,  a  capable  lawyer  being  employed  for 
the  purpose.     (See  Page  184.) 


CHAPTER  IX. 

FAEMERS'  AND    PEOPLE'S   EXCHANGES. 

Their  Purpose  and  Success. — These  exchanges 
vary  in  their  scope  and  methods.  The  Farmers'  Alli- 
ance Exchange  is  often  a  central  State  agency,  without 
much  capita],  for  buying  in  bulk  supplies  ordered  by 
Sub-Alliances,  forwarding  the  same  for  distribution  at 
the  wholesale  price  paid  plus  expenses.  Other  State 
Alliance  Exchanges  aim  to  do  business  on  the  principle 
of  a  cooperative  store,  buying  at  one  price,  selling  at 
another,  and  dividing  profits  between  interest  on  capital 
and  dividend  on  purchases  ;  but  also  making  a  business 
of  selling  stock,  produce,  etc.,  for  farmers  on  commis- 
sion, making  advances  on  consignments  and  the  like. 
The  ambitious  but  unsuccessful  Texas  exchange  (see 
Page  34)  was  among  the  first  of  this  class,  but  its  suc- 
cessors have  profited  by  its  experience  and  many  of  them 
are  accomplishing  much  good.  When  of  the  class  first 
described,  these  agencies  are  only  a  repetition  of  the  old 
grange  system,  which  has  proved  its  lack  of  permanency, 
but  appear  now  to  be  paving  the  way  for  more  business- 
like cooperation.  They  have  served  a  useful  purpose  in 
greatly  reducing  prices  on  agricultural  machinery  and 
farmers'  supplies,  which  had  been  advanced  since  tlie 
reduction  forced  by  the  Grange  in  a  similar  way  fifteen 
or  twenty  years  ago.  The  managers  or  State  business 
agents  of  the  Alliances  have  a  national  organization,  that 
has  immense  possibilities  if  backed  by  ample  capital. 
A  brief  description  of  the  Kansas  Alliance  Exchange 

207 


208  HOW    TO   COOPERATE. 

Company  will  serve  for  all  these  enterprises.     (See  Ap- 
pendix for  by-laws.) 

The  Kansas  Farmers'  Exchange  Company  was 
organized  in  August  of  1889  to  transact  a  general  mer- 
cantile business,  including  buying  and  selling  of  all 
classes  of  produce  and  goods.  The  authorized  capital 
was  half  a  million  dollars  in  one  thousand  shares  of 
$500  each,  membership  being  confined  to  Alliance  men. 


Fig.  25.     Edwin  Snyder,   Live  Stock  Agent  Kansas  Alliance 
Exchange  Company. 

The  business  offices  are  now  located  at  Kansas  City, 
Kansas.  Trading  is  done  on  the  cooperative  basis. 
Division  of  profits  is  a  little  peculiar,  forty  per  cent  of 
the  net  profits  going  to  capital,  the  other  sixty  per  cent 
going  to  dividends  or  rebate  to  purchasers.  The  divi- 
dend is  payable  in  cash  to  shareholders,  while  in  the 
case  of  Alliance  men  who  are  not  shareholders  it  is 
passed  to  their  credit  against  shares  of  stock.     Non- 


FAKMERS'    AND    PEOPLE'S    EXCHANGES.  209 

members  receive  no  dividends.  The  business  includes 
all  lines  of  goods,  but  at  the  start  no  stock  of  any  kind 
was  carried,  the  plan  being  to  issue  a  large  catalogue 
and  price  list  of  goods  for  which  contracts  have  been 
made  with  manufacturers  and  wholesalers,  and  transfer 
the  orders  received  from  Sub- Alliances  to  these  parties. 
The  possibilities  of  immensely  extending  their  usefulness 
have  led  the  management  to  call  for  more  capital  with 
which  to  carry  a  stock  of  goods.  The  Exchange  realizes 
that  it  ought  to  supply  all  the  local  cooperative  stores  in 
the  State,  uniting  with  the  function  of  a  wholesale  soci- 
ety those  of  a  selling  agency  for  farm  products. 

A  Strong  Point  is  Made  of  Economy  in  manage- 
ment, the  company  seeking  to  do  a  plain,  straight  coop- 
erative business,  neither  fearing  nor  courting  competi- 
tion. In  1891  its  sales  of  binding  twine  reached  over 
one  hundred  car-loads,  the  twine  being  sold  uniformly 
at  the  same  price  to  all — one-half  cent  per  pound  above 
cost  at  retail  and  one-fourth  cent  above  cost  to  local 
cooperative  stores.  The  sales  for  the  nine  months  ended 
Sept.  30,  1890,  aggregated,  of  farming  implements  $50,- 
000,  groceries  $40,000,  barbed  wire  $10,000,  binding 
twine  $35,000,  vehicles  and  machinery  $26,000.  It  also 
sold  on  commission  for  its  members  grain  to  the  amount 
of  over  $250,000,  and  live  stock  amounting  to  $600,000. 
The  nine  months'  total  was  thus  about  $1,000,000,  the 
expense  of  doing  which  was  $9,693.37,  the  profits  or 
earnings  being  within  $85  of  this  amount.  This  does 
not  include  the  profits  on  the  live  stock  business,  which 
goes  to  the  shippers,  as  is  explained  in  the  account 
further  on  of  the  cooperative  cattle-growers'  company. 

To  transact  this  amount  of  business,  the  paid-up  stock, 
Sept.  30,  amounted  to  $21,000,  three-quarters  of  which 
was  cash,  and  the  balance  oflfice  fixtures,  merchandise 
and  bills  receivable.  The  business  is  managed  by  an 
executive  committee  of  three,  who  give  it  all  their  time. 
14 


210  HOW  TO   COOPERATE. 

Grain  is  Stored  and  Cash  Advances  Secured  upon 
it  by  delegating  certain  large  and  well  establislied  com- 
mission companies  as  Alliance  grain  agents.  When  the 
Exchange  secures  capital  enough  to  buy  or  build  its  own 
elevators  it  will  do  this  business  itself.  By  its  present 
arrangement,  farmers  can  store  their  grain  in  the  eleva- 
tors (at  the  large  cities)  of  the  authorized  Alliance  agent 
for  one  cent  per  bushel  for  the  first  thirty  days,  and  half 
a  cent  for  every  thirty  days  thereafter,  with  insurance 
at  cost.  The  shipper  is  issued  a  warehouse  receipt  for 
the  wheat,  specifying  the  amount  and  grade,  this  receipt 
being  negotiable  or  immediately  available  as  collateral 
security.  Almost  any  bank  will  advance  money  on  these 
receipts,  or  the  company  will  make  advances  to  the 
amount  of  three-quarters  of  its  value,  with  interest  at 
ten  per  cent.  This  is  done  with  the  understanding  that 
whenever  the  market  value  of  wheat  is  within  five  cents 
per  bushel  of  the  amount  advanced,  with  accrued 
charges,  the  owner  will  be  advised,  and  if  he  does  not 
wish  to  put  up  money  enough  to  maintain  the  five  cent 
margin,  the  wheat  can  be  sold  and  the  balance  remitted 
to  the  owner. 

Improved  freight  rates  are  secured  through  the  same 
agency.  Thus  farmers  are  able  to  ship  their  own  grain, 
because  they  have  nothing  to  do  with  it  after  the  wheat 
is  loaded  on  the  cars.  It  gives  them  a  chance  to  secure 
and  store  their  wheat  when  in  the  best  mercantile  condi- 
tion, and  an  opportunity  to  realize  on  it  without  being- 
forced  to  sell  when  prices  are  not  satisfactory. 

The  Farmers  Run  the  Business.  —  Here  as  in 
other  States  these  enterprises  are  directed  and  managed 
by  farmers  themselves.  Thus  all  of  the  directors  of  the 
Kansas  Exchange  are  successful  farmers,  except  F.  M. 
Newland,  who  has  been  successfully  engaged  in  mercan- 
tile pursuits  all  his  life.  Messrs.  Benson,  King,  Cleve- 
land, and  Snyder  have  served  one  or  more  terms  in  the 


FAKMERS'    AND    PEOPLE'S   EXCHANGES.  211 

Legislature,  and  all  are  old  residents  of  Kansas.  Presi- 
dent Benson,  an  Illinoisan,  has  a  large  farm  at  Haven, 
Kansas  ;  Secretary  Sandusky,  a  Kentuekian,  owns  a 
farm  in  Cherokee  county,  where  he  has  held  positions  of 
honor  and  trust ;  Vice-President  House  is  an  extensive 
farmer  at  Cloverdale ;  Bookkeeper  Cleveland  has  had 
mercantile  experience  in  Chicago,  but  was  taken  from 
his  farm  at  Agenda ;  Treasurer  King,  an  Ohioan,  has  a 
good  farm  at  Tannehill.  We  give  these  facts  to  impress 
our  farmer  readers  with  self-confidence  in  their  own 
ability  to  manage  their  own  business. 

EXCHANGES  CONFINED  TO   MAEKETING. 

The  Delaware  Fruit  Exchange  shows  what  can 
be  done  in  this  single  line.  Until  its  advent,  growers 
shipped  their  peaches  to  the  large  markets  to  be  sold  on 
commission.  The  result  was  that  frequently  the  mar- 
kets were  glutted  and  the  prices  received  did  not  cover 
the  cost  of  transportation,  baskets  and  sellers'  commis- 
sion. The  prices  were  very  uneven,  there  was  great  dif- 
ficulty in  getting  sufficient  cars,  freight  rates  were  exor- 
bitant, there  was  great  loss  in  failure  to  return  packages, 
and  the  profits  were  largely  consumed  by  the  commis- 
sion merchants'  charges. 

To  remedy  some  of  these  abuses,  the  Delaware  Fruit 
Exchange  was  organized  (mainly  by  W.  P.  Corsa)  with 
a  few  hundred  dollars  capital,  which  served  to  put 
up  a  small  building  at  Wyoming,  Del.,  in  which  fruit 
could  be  sold  at  auction,  with  the  necessary  accommoda- 
tions for  clerks,  telegraph  operators,  and  other  conven- 
iences for  transacting  business.  Before  the  opening  of 
the  peach  season  a  canvass  was  made  of  the  principal 
markets  throughout  the  country,  and  the  dealers  in 
fresh  fruits  were  invited  to  send  buyers  to  the  Exchange. 
The  idea  of  the  Exchange  was  to  have  all  the  fruit  that 
was  brought  to  it  inspected  and  carefully  graded,  and 


218 


HOW   TO   COOPERATE. 


farmers'  akd  people's  exchanges,  213 

then  sold  at  auction  to  the  highest  bidder.  It  was  pro- 
posed to  extend  the  operation  of  the  Exchange  through- 
out the  whole  Peninsula,  by  having  a  competent  and 
sworn  inspector  at  the  different  shipping  points  who 
should  telegraph  every  morning,  before  the  Exchange 
opened  for  business,  the  number  of  cars  of  the  different 
grades  of  peaches  that  would  be  for  sale  at  his  shipping 
point.  Having  established  confidence  in  the  grade,  this 
fruit  at  all  these  different  stations  could  be  sold  at  auc- 
tion on  the  Exchange  without  the  buyer  ever  seeing  it. 

The  Grower  Establishes  the  Market — The  re- 
sult was  that  for  several  seasons  the  Exchange  worked 
quite  satisfactorily.  The  trade  found  it  much  better  to 
send  a  man  to  buy  such  peaches  as  they  desired,  at  the 
point  where  the  peaches  were  collected,  than  to  have  the 
fruit  shipped  to  their  market  indiscriminately.  All 
fruit  was  paid  for  on  the  spot  as  soon  as  sold,  the 
Exchange  reserving  one  cent  per  basket  for  its  ser- 
vices and  charging  five  dollars  per  car  for  loading  the 
fruit.  The  baskets  were  sold  with  the  fruit.  .  Commu- 
nication by  wire  was  kept  up  with  all  the  principal  mar- 
kets, and  the  price  of  peaches  was  made  at  Wyoming 
instead  of  in  New  York  and  other  cities.  There  was 
always  competition  among  the  buyers  to  secure  the  best 
fruit,  which  kept  up  prices. 

Most  of  the  former  abuses  of  the  peach-marketing  sys- 
tem were  in  this  way  overcome.  The  farmer  drove  up 
to  the  Exchange  with  his  peaches  properly  graded,  had 
them  inspected  and  the  grade  guaranteed,  a  sample  bas- 
ket or  two  of  each  grade  was  exposed  at  the  auctioneer's 
stand,  sold  for  what  it  would  bring,  and  the  lot  immedi- 
ately loaded  upon  the  cars.  The  money  was  paid  to  the 
Exchange  on  the  spot  and  turned  over  to  the  farmer,  less 
a  commission  of  one  cent  per  basket.  The  farmer  thus 
had  no  further  trouble  with  freight  rates,  cars,  commis- 
sion merchants,  or  other  evils  of  the  old  system.     The 


214  HOW  TO   COOPERATE. 

fanners  also  received  a  higher  price  for  their  fruit,  not 
only  because  it  was  better  assorted  than  formerly,  but 
because  the  buyers  came  from  all  parts  of  the  country, 
and  therefore  distributed  the  peaches  more  widely  than 
had  previously  been  the  case.  Thus  gluts  were  avoided, 
and  the  fruit  being  shipped  direct  to  market  by  the 
buyer  arrived  there  in  better  condition  than  under  the 
previous  state  of  affairs. 

This  is  unquestionably  the  correct  principle  for  mar- 
keting the  peach  crop,  and  a  principle  that  can  be 
applied  with  equal  facility  to  any  other  crop  that  can  be 
massed  in  sufficiently  large  quantities  to  attract  buyers. 
But  the  Exchange  has  not  been  so  successful  as  has  been 
hoped  for  various  reasons,  principally  because  many  fruit 
growers  would  persist  in  selling  to  the  assembled  buyers 
outside  of  the  Exchange.  So  long  as  they  could  do  this 
and  save  ihe  commission  of  one  cent  per  basket,  these 
growers  considered  it  the  proper  thing  to  do,  failing 
entirely  to  recognize  the  truth  of  the  fact  that  the  suc- 
cess of  the  effort  to  attract  all  the  principal  buyers  to 
one  or  two  points  must  depend  upon  the  growers  coop- 
erating with  such  a  medium  as  the  Exchange. 

The  Weak  Points  in  the  Delaware  Fruit  Exchange 
were  three-fold  :  1,  members  did  not  invest  sufficient 
capital  to  hold  their  interest ;  2,  the  profits  from  com- 
missions were  intentionally  small,  to  cover  expenses  only, 
instead  of  being  sufficient  to  accumulate  a  surplus ;  3, 
having  so  little  at  stake  financially,  so  that  non-members 
and  those  who  sold  outside  the  Exchange  reaped  its 
advantages  without  cost,  and  the  business  season  being 
only  a  few  weeks  in  duration,  the  members  could  not  be 
held  together,  and  a  light  crop  year  completed  their  dis- 
organization. 

All  these  defects  could  have  been  guarded  against,  the 
success  of  this  perfect  system  of  markebing  insured,  and 
immensely  greater  advantages  secured,  if  the  Exchange 


PARMEES'   AND    PEOPLE'S   EXCHANGES.  215 

had  simply  had  a  little  more  capital,  charged  more  com- 
mission and  used  its  surplus  for  buying  a  stock  of  goods 
for  a  cooperative  store  that  should  operate  the  year 
through,  that  might  in  time  develop  into  a  sort  of 
wholesale  agency  for  the  similar  stores  at  all  the  branch 
shipping  points.  This  remedy  has  been  applied  with 
success  in  New  Jersey,  as  the  ensuing  pages  describe. 

COOPERATIVE   PRUIT    SHIPPERS   OF    THE    PACIFIC   COAST. 

The  California  Fruit  Union  was  organized  in  1886, 
with  250,000  shares  of  one  dollar  each,  which  were  sub- 
scribed for  by  fruit-growers  on  the  basis  of  one  share  per 
acre  in  bearing  fruit  or  vegetables.  Its  headquarters 
are  at  Sacramento,  L.  W.  Buck  being  the  present  secre- 
tary and  general  manager,  a  position  held  by  H.  A. 
Fairbanks  up  to  this  year.     (See  Appendix  for  by-laws.) 

First  formed  as  an  exclusive  organization  for  growers, 
one  year's  business  with  buyers  working  in  opposition  to 
the  growers  proved  disastrous  to  both,  but  more  so  to 
the  buyers  than  to  those  who  produce  their  own  fruit. 
In  the  second  year  some  buyers  joined  with  the  growers 
and  worked  with  them,  and  have  continued  to  do  so 
since,  such  members  being  required  to  take  at  least  two 
hundred  shares  each.  The  stock  of  itself  was  not  sup- 
posed to  be  a  money-making  investment,  but  most  grow- 
ers were  willing  to  contribute  one  dollar  per  acre  to 
secure  a  better  method  of  marketing. 

After  the  parent  organization  had  completed  its 
arrangements  for  refrigerator  and  ventilator  cars,  quick 
transit,  reduced  rates,  etc.,  branch  unions  were  organ- 
ized at  each  important  shipping  point.  The  members 
of  these  branches  elected  a  manager,  who  attended  to 
getting  together  enough  fruit  to  fill  the  car,  loading, 
etc.  His  salary  and  expenses  are  met  by  his  commis- 
sions on  the  box  lumber,  wrapping  paper,  nails,  etc., 
which  he  furnishes  to  the  members,  obtaining  the  same 


216 


HOW  TO  COOPERATE. 


through  the  central  union  at  such  low  prices  that  he  can 
sell  out  at  a  profit  and  yet  be  below  retail  prices.  The 
main  offce  notifies  the  branches  when  trains  will  be 
dispatched  and  how  many  cars  each  can  have  in  each 
train.  As  a  saving  of  one  hundred  dollars  per  car  is 
effected  when  solid  trains  of  ten  or  fifteen  ears  of  fruit 
are  shipped,  this  item  alone  is  sufficient  to  warrant 
the  cooperation.      The  main  office  also  receives  daily 


Fig.  27.    Loading  Peaches  at  the  Delawabe  Fruit  Exchange. 


reports  by  wire  of  all  sales  of  the  produce  made  in  the 
Eastern  markets,  which  are  transmitted  by  telephone 
and  telegraph  to  local  branches. 

The  California  Fruit  Union  does  not  buy  any  fruit  or 
incur  any  indebtedness  except  for  running  expenses  and 
freight.  Hence  the  amount  of  capital  employed  is  lim- 
ited, as,  at  the  end  of  the  year,  all  profits  are  divided 
among  the  shippers  in  proportion  to  the  selling  of  their 
respective  shipments,  after  paying  six  per  cent  interest 


farmers'  and  people's  exchanges.         317 

on  capital.  Any  individual  may  buy  or  ship  as  much 
fruit  as  he  may  desire,  the  great  object  being  to  enable 
small  growers  to  ship  in  small  quantities  at  car-load  and 
train  rates. 

How  the  Business  is  Conducted  will  be  best  ex- 
plained by  first  publishing  the  contract  made  by  the 
union  with  its  selling  agencies  or  commission  men  in 
the  Eastern  cities : 

THIS  AGREEMENT,  Made  and  entered  into  this day  of 1&— , 

by  and  between  tiie  California  Fruit  Union,  a  corporation  organized 
and  existing  under  and  by  virtue  of  the  laws  of  the  State  of  California, 

the  party  of  tlie  first  part,  and of the  parly  of  the  second  part; 

Wltnesseth:  That,  wliereas,  the  party  of  the  first  part  is  engaged  In 
the  business  of  shipping  green  and  dried  fruits  and  other  California 

farm  products,  and  is  desirous  of  making  shipments  to  the  city  of 

in  the  State  of and  of  appointing  an  agent  resident  at  said  place, 

to   receive   and   dispose   of   the  shipments   made   thereto; And, 

Whereas,  the  party  of  the  second  part  is  desirous  of  being  appointed 
such  agent :  Now,  Therefore,  in  consideration  of  the  premises,  the  par- 
ties hereto  do  hereby  covenant  and  agree  as  follows,  to  wit : 

The  party  of  the  first  part  does  hereby  appoint  the  party  of  the  sec- 
ond part  its  agent,  to  receive,  take  charge  of,  and  sell,  all  shipments 

made  by  the  party  of  the  first  part  to  the  said  city  of during  the 

existence  of  this  agreement.  Each  of  said  shipments  shall  be  clearly 
marked  so  as  to  designate  and  Indicate  for  whose  account  and  benefit 
it  is  made  by  the  party  of  the  first  part;  and  shall  be  accompanied  by 
an  invoice  showing  the  character  of  said  shipment  and  the  name  of 
the  person  for  whose  benefit  it  is  made.  Any  discrepancy  between 
any  shipment  upon  its  arrival  at  its  destination  and  the  said  invoice 
shall  be  immediately  reported  by  the  party  of  the  second  part  to  the 
party  of  the  first  part. 

Tlie  party  of  the  second  part  shall  receive  and  take  charge  of  each 

shipment  immediately  upon  its  arrival  at  said  city  of and  shall 

pay  all  freight  and  cartage  expenses  chargeable  against  the  same,  and 
shall  repay  to  the  party  of  the  first  part  all  moneys  advanced  for  ac- 
count thereof  by  said  party  of  the  first  part,  and  shall  promptly  sell 
the  same  for  the  highest  price  obtainable,  and  after  deducting  the 
advances  and  payments  made  by  him  for  the  purposes  aforesaid,  and 
a  commission  at  tlie  rate  of  ten  per  cent  on  the  gross  amount  realized 
on  the  sale  of  said  green  fruits,  and  five  per  cent  on  ail  other  products, 
shall  remit  the  balance  by  bill  of  exchange  or  postal  order  to  the  per- 
son for  whose  benefit  said  shipment  was  made.  The  said  remittance 
shall  be  made  promptly  within  ten  days  after  making  of  said  sale,  and 
shall  be  accompanied  by  an  itemized  account  of  sales,  properly  au- 
thenticated by  the  said  party  of  the  second  part,  showing  in  detail  for 
what  price  each  package  of  said  shipment  was  sold. 

Said  party  of  the  second  part  shall  at  the  same  time,  by  bill  of  ex- 
change or  postal  order,  remit  to  the  party  of  the  first  part  all  advances* 
made  by  it  for  account  of  said  shipment,  and  so  mucn  of  the  said  ten 
per  cent  as  shall  equal  three  per  cent  of  the  gross  amount  realized  on 
green  fruit,  and  one  and  one-half  per  cent  on  all  other  products ; 
which  said  remittance  shall  be  accompanied  by  a  duplicate  of  the 
account  of  sales  sent  to  the  person  for  whose  benefit  the  shipment 
was  made. 

The  party  of  the  second  part  shall,  within  twenty-four  hours  after 
the  receipt  of  each  shipment,  notify  by  mail  the  person  for  whose 
benefit  it  was  made  of  the  receipt  thereof,  its  condition,  the  prices  at 
which  like  products  are  then  selling,  and  if  any  portion  thereof  h:is 
been  sold,  the  portion  so  sold  and  tlie  price  realized  therefrom,  and 
the  portion  on  hand.    During  the  day  on  which  any  shii)ment  may  be 


S18 


HOW  TO  COOPERATE. 


received  by  the  party  of  the  second  part,  lie  shall,  at  his  own  cost  and 
expense,  notify  the  party  of  the  first  part  by  telegram  of  the  re- 
ceipt thereof,  lU  condition,  and  prices  which  like  products  are  then 
commanding.  .,,  ^      ~   ■     ^     ^^      ^   ^     ^ 

If  any  shipment  shall  not  sell  for  an  amount  sufficient,  after  deduct- 
ing the  commission  herein  provided  for,  to  repay  to  the  party  of  the 
second  part  tlie  advances  he  may  have  made  thereon,  the  party  of  the 
first  part  will  pay  such  advances,  or  so  much  thereof  as  said  shipment 
shall  fail  to  pay. 

Tlie  party  of  the  second  part  sahll  not,  during  the  existence  of  this 
agreement,  receive  or  become  the  agent  for  the  sale  of,  or  be  in  any 
manner  interested  in,  the  purchase,  sale,  or  disposition  of  any  Califor- 
nia fruits  and  other  farm  products,  of  the  kind,  qualities,  or  varieties 
shipped  by  the  party  of  the  first  part,  except  as  in  this  agreement  pro- 
vided. Except  that  said  party  of  the  second  part  may  receive  and  sell 
on  commission  any  California  fruit  which  may  be  consigned  to  it  by 


Fig.  28.    A  Cooperative  Evaporating  factory, 
Where  the  Surplus  Fruit  of  the  Delaware  Fruit  Exchange  Is  Utilized. 


parties  other  than  the  party  of  the  first  part,  provided  that  they  treat 
such  consignments  in  the  same  manner  as  though  they  were  California 
Fruit  Union  shipments,  charging  ten  per  cent  commission  for  handling 
the  same  and  rebating  —  per  cent  of  the  gross  sales  to  the  party  of  the 
first  part.  Notification  by  telegram  must  be  made  to  the  manager  of 
the  Union  of  such  receipt  or  expected  receipt  as  soon  as  ascertained.. 
The  object  of  this  provision  is  to  prevent  the  party  of  the  second  part 
from  engaging  or  oecoming  interested  in  any  business  which  may  in 
any  manner  injure  or  compete  with  the  business  of  the  party  of  the 
first  part,  or  those  for  whom  it  mav  act. 

The  party  of  the  second  part  shall  be  chargeable  with  the  amount  for 
which  any  shipment  may  oe  sold  by  him,  although  he  may  fail  to  col- 
lect the  same  from  the  purchaser.  The  party  of  the  second  part  shall, 
during  the  existence  of  this  agreement,  keep  full,  true  and  accurate 
books  of  account,  in  which  shall  be  entered  and  set  down  in  detail  all 
the  business  transacted  by  him  for  the  party  of  the  first  part,  which 


farmers'  and  people's  exchanges.  219 

said  books  shall  at  all  times  be  submitted  by  said  party  of  the  second 
part  to  the  inspection  and  examination  of  any  authorized  agent  of  the 
said  party  of  the  first  part. 

All  products  received  by  the  party  of  the  second  part  under  this 
agreement  shall  be  sold  by  him  at  private  sale,  unless  tlie  said  party 
of  the  first  part  shall  direct  the  same  to  be  sold  at  public  auction,  in 
which  event  the  party  of  the  second  part  shall  cause  the  same  to  be 
sold  in  that  manner,  and  shall  publish  notice  of  said  sale  in  at  least 

two  daily  papers  published  in  said  city  of and  by  catalogue  freely 

circulated  among  merchants  engaged  in  the  fruit  business  therein, 
said  catalogue  to  be  similar  to  those  used  in  the  sale  of  Mediterranean 
fruits  at  auction. 

In  all  cases,  the  auctioneer  selected  shall  be  one  who  is  acceptable  to 
the  board  of  trustees  of  the  union.  All  expenses  of  every  kind  in- 
curred in  making  such  auction  shall  be  paid  by  said  party  of  the  second 
part  out  of  the  proportion  of  the  commission  on  said  sale  which  he 
may  be  entitled  to  retain,  as  hereinbefore  set  forth.  Immediately 
after  making  such  auction  sale,  the  party  of  the  second  part  shall  for- 
ward, by  mail,  to  every  person  who  may  have  been  interested  in  the 
products  disposed  of  thereat,  a  copy  of  said  catalogue,  upon  which 
shall  be  marked  and  set  down  opposite  each  lot  sold  the  prices  real- 
ized therefor.  The  party  of  the  second  part  will,  upon  the  execution 
of  these  presents,  furnish  and  deliver  to  the  party  of  the  first  part  a 
satisfactory  bond  for  his  faithful  performance  of  this  agreement. 

This  agreement  may  be  terminated  at  any  time  by  the  party  of  the 
first  part  at  its  option ;  and  by  the  party  of  the  second  part  on  giving 
fifteen  days'  notice  of  such  intention.  In  witness  whereof,  the  said 
party  of  the  first  part  has  caused  these  presents  to  be  executed  by  its 
president  and  secretary  thereunto  duly  authorized,  and  the  said  party 
of  the  second  part  has  hereunto  set  his  hand  and  seal  the  day  and  year 
first  above  written. 

The  benefits  of  such  a  contract  to  both  parties,  espe- 
cially members  of  the  Union,  cannot  be  overestimated. 
The  absolute  safeguards  and  the  selling  by  auction  are 
of  immense  value  to  shippers.  Owing  to  the  distance 
from  market  the  Union  cannot  well  compel  the  attend- 
ance of  Eastern  buyers,  as  was  the  case  in  Delaware. 
There  are,  however,  many  resident  buyers  who  have 
cooperated  with  the  Union  and  offered  many  chances  to 
growers  that  they  would  not  have  done  except  for  the 
Union.  The  collection  of  claims  for  losses  against  rail- 
roads is  another  function  of  the  organization. 

These  Benefits  Cost  Shippers  Nothing,  but  are 
all  paid  for  by  the  commission  merchants,  who  give 
the  Union  three-tenths  of  their  gross  commissions.  The 
Union  can  guarantee  each  agent  a  continuous  and  daily 
supply  during  the  season,  so  that  the  agent  can  afford 
to  do  business  for  less  than  when  receiving  only  an  occa- 
sional car. 

The  agents  usually  charge  all  shippers  ten  per  cent 
commission,  retaining  seven  per  cent  for  their  services 


220  HOW   TO   COOPERATE. 

and  returning  the  other  tliree  per  cent  to  the  Union 
with  a  duplicate  of  the  amount  of  sales,  the  original  of 
which  is  sent  to  each  shipper  with  his  check  for  the  net 
proceeds.  Thus  the  Union  handles  none  of  the  ship- 
per's money,  but  it  comes  to  him  direct  from  the  agent 
who  sold  his  fruit,  while  the  agent  gives  three-tenths  of 
his  commission  to  the  Union  for  guaranteeing  his  supply. 

This  three  per  cent  netted  the  Union  about  160,000 
in  1890,  out  of  which  all  expenses,  salaries,  oflBce  rent, 
incidentals,  etc.,  were  paid,  and  some  $34,000  profits 
remained.  This  was  divided  by  declaring  six  per  cent 
interest  on  the  capital,  setting  aside  two  per  cent  for  a 
reserve  and  dividing  the  balance  among  the  shippers  in 
proportion  to  the  amount  each  had  shipped.  The  bal- 
ance thus  divided  was  two  and  one-tenth  per  cent  on  the 
gross  sales,  which,  deducted  from  the  agent's  ten  per 
cent  commission, .  reduced  the  actual  commission  paid 
by  each  shipper  to  seven  and  nine-tenths  per  cent. 

The  Great  Success  of  the  Effort  is  most  encourag- 
ing. The  members  number  nearly  1,000,  owning  15,000 
paid  up  shares.  The  business  shows  a  heavy  increase. 
In  the  seven  shipping  months  of  1890  the  Union  handled 
1,400  carloads  of  fruit,  and  600  more  were  shipped  by 
its  members,  making  a  total  of  2,000  cars  handled  by 
the  Union  out  of  the  3,300  cars  shipped  by  the  entire 
State.  The  consignors  increased  from  173  the  previous 
year  to  322,  from  thirty-one  different  points.  Of  the  di- 
rect shipments  190  cars  went  by  special  trains,  476  by 
passenger  trains,  258  by  freight,  and  449  by  refrigerator 
cars.  Chicago  took  828  cars,  New  York  136,  Boston 
116,  Minneapolis  74,  Omaha  75,  New  Orleans  58,  St.  Paul 
39,  St.  Louis  32,  Louisville  10,  and  Kansas  City  seven. 

The  record  books  show  duplicate  accounts  of  sales  of 
578,232  boxes  and  234,617  crates  of  fruit,  amounting 
to  $1,501,023.  From  this  was  deducted  for  freight, 
$620,688;  cartage,  commission  and  cold  storage,  $158,- 


PAEMERS'   AND    PEOPLE'S  EXOHAKOES. 


221 


438 ;  leaving  net  returns  of  $721,897.  The  Union  was 
never  more  prosperous,  having  a  balance  of  some  134,000 
to  divide  in  reserves, — interest  on  capital  and  rebate  on 
shipments,  as  appears  from  the  statement  submitted  to 
the  annual  meeting  at  San  Francisco  in  January,  1891 : 


STATEMENT  CALIFORNIA  FRUIT  UNION  FOR  1890. 

PAID 

Office  expenses.. 

OUT. 

$1,614.49 
.12,657.97 
..6,460.42 
S.  1,468.71 
..     660.75 
..    365.60 
'g    250.57 
..2,881.10 
. .      31.25 

1 

26,390.86 

33,916.92 

430.00 

ASSETS. 

..$15,174.25 

W«.R4 

Salary 

Traveling  Expen' 
Office  Fixtures. .. 

Telephone 

Freight  and  Load 
Telegraph  Acc't.. 

Taxes 

Cash  in  bank 

Cash  on  hand. . . . 

Received     from    Eastern 
Agents  being  3-lOths  of 
their  commissions 43,728.21 

Uncalled  for  balances 

Dividend  No.  1 94.16 

Dividend  No.  2 164.42 

Dividend  No.  3 207.18 

Rebate  No.  2 185.11 

Rebate  No.  3 .^i4.9i 

^60,737.78 

$60,737.78 

The  main  thing  to  regret  in  this  wonderfully  success- 
ful effort  is,  that  the  net  profits  are  not  utilized  as  a 
filnd  for  the  establishment  of  a  State  wholesale  exchange, 
to  furnish  supplies  direct  to  local  stores  and  individuals. 
The  members  would  get  far  more  benefit  out  of  the 
money  used  in  this  way  than  from  the  comparatively 
small  driblets  divided  among  them  in  the  shape  of 
rebates. 

MARKETING   CATTLE   COOPERATIVELY. 

How  to  Beat  the  Packers'  Combine. — It  is  safe 
to  say  that  no  one  branch  of  agriculture  in  the  United 
States  has  suffered  more  directly  from  the  extortion  of 
monopolies  than  has  the  cattle  industry  at  the  hands  of 
the  packers'  combination.  It  has  been  conclusively 
demonstrated  that  this  trust  practically  controls,  if  it 
does  not  own,  the  principal  live  stock  exchanges  or  cattle 
markets,  as  at  Chicago,  St.  Louis,  Kansas  City,  Omaha, 
Pittsburg  and  lesser  points.  The  combine  regulates 
prices  and  prevents  competition  between  its  members 
for  cattle,  thus  depressing  prices  to  the  cattle  grower. 


222  HOW   TO    COOPERATE. 

On  the  other  hand,  it  undersells  local  butchers  wherever 
necessary  to  secure  a  foothold  and,  after  having  crowded 
them  out,  forces  up  prices,  compelling  consumers  to  pay 
extortionate  values. 

The  reader  should  understand  that  live  stock  ex- 
changes, as  now  constituted,  are  organizations  of  com- 
mission men  principally  for  the  purpose  of  compelling 
their  members  to  charge  certain  prices  for  selling  stock 
— based  on  fifty  cents  per  head  for  cattle,  twenty-five 
cents  for  calves,  and  ten  cents  for  hogs  and  sheep.  They 
have  induced  the  packers  to  join  their  exchange,  and 
have  a  rule  that  no  member  shall  do  any  business  with 
an  expelled  member. 

No  more  flagrant  outrage  exists  than  that  a  few  com- 
mission men  should  be  allowed  to  take  possession  of  the 
public  market,  and  compel  the  public  to  pass  its  stock 
through  their  hands  at  a  charge  which  the  operations 
of  this  cooperative  company  show  is  at  least  twice  a  rea- 
sonable compensation. 

But  cattle  growers  found  by  costly  experience  that 
neither  grumbling  nor  legislation  would  protect  them 
against  a  monopoly  that  forced  down  the  price  of  what 
they  had  to  sell  and  put  up  the  price  of  what  they  had 
had  to  buy.  The  great  cattle  growers  of  Texas,  Colo- 
rado, New  Mexico,  Kansas,  Nebraska,  Missouri  and 
other  States  finally  came  to  the  sound  conclusion  that 
the  only  true  way  out  was  to  compete  with  the  trust  by 
means  of  a  cooperative  organization. 

The  American  Live  Stock  Commission  Com- 
pany was  therefore  incorporated  in  March,  1889,  under 
the  laws  of  Illinois,  with  a  capital  of  $100,000  in  1,000 
shares  of  1100  each.  While  each  share  is  entitled  to  a 
vote,  no  one  person  or  society  can  own  more  than  twenty- 
five  shares.  Of  the  profits,  thirty-five  per  cent  go  to 
capital  and  sixty-five  per  cent  in  dividends  or  rebate  on 
the  commissions  paid  by  shareholders.     Its  object  is  to 


FARMBES'   AND    PEOPLE'S  EXCHANGES. 


223 


engage  in  the  business  of  buying,  selling  and  handling 
live  stock  in  the  various  stockyards  and  markets  of  the 
country  and  to  encourage  the  raising  and  feeding  of 
stock  for  market.  The  headquarters  are  at  Union  Stock 
Yards,  Chicago,  with  branches  at  Omaha,  Kansas  City 
and  St.  Louis.     Aside  from  the  cooperative  feature  of 


Fig.  29.    Eli  Tittts,  Manager  American  Live  Stock  Commission 
Company. 


distribution  of  profits  and  conduct  of  the  business  by 
those  who  furnish  the  cattle  it  handles,  the  by-laws  are 
those  usual  with  joint  stock  corporations.  Including  the 
State  alliances  of  Kansas,  Nebraska  and  Missouri,  and 
the  Kansas  State  grange,  there  are  (August,  1891)  two 
hundred  and  sixty-four  stockholders. 


224  HOW  TO   COOPERATE. 

The  company  charges  the  same  commissions  as  other 
houses,  dividing  its  profits  as  above  stated.  It  has  natu- 
rally met  the  strongest  possible  opposition  at  Chicago, 
in  particular.  The  animus  of  the  fight  is  simply  that 
members  of  the  live  stock  exchange  want  its  business 
and  their  own  prices  for  doing  it,  and  do  not  want  the 
producers  to  cooperate  and  do  the  business  for  them- 
selves at  a  saving  of  fifty  to  seventy-five  per  cent.  The 
company  was  therefore  expelled  by  vote  from  the  Chi- 
cago live  stock  exchange.  When  it  persisted  in  trading 
there  the  exchange  secured  a  court  verdict  that  knocked 
the  company  out  of  that  market  on  the  plea  that  this 
cooperative  affair  was  a  dangerous  trust  conspiracy  !  An 
injunction  against  this  infamous  decision  was  secured, 
and  the  company  continues  business  at  Chicago,  while 
its  case  is  before  the  supreme  court  of  the  State,  where 
it  confidently  expects  to  win.  The  company  has  had 
much  more  law  than  justice,  but  the  members  know 
that  their  principles  are  eternally  right  and  just,  and 
have  the  utmost  confidence  in  ultimate  success  and  legal 
victory. 

Progress,  Business  and  Profits. — The  remarkable 
results  of  the  American  Live  Stock  Commission  Com- 
pany, demonstrated  by  incontestable  success,  show  the 
wisdom  and  economy  of  its  management  and  prove  the 
ability  of  cooperation  to  combat  the  ''  trust,"  even  in 
the  cattle  business. 

It  began  business  in  May,  1889,  with  a  paid  up  capi- 
tal of  $25,000,  and  on  Nov.  30  divided  $45,000  profits 
among  its  shareholders.  The  thirty-five  per  cent  of 
this  sum  accruing  to  capital  equals  fifteen  dollars  per 
share,  or  sixty  per  cent  interest  on  the  twenty-five  dol- 
lars per  share  paid  up  seven  months  before.  The  bal- 
ance, declared  as  dividend  on  the  commissions  paid  by 
shareholders  on  the  cattle  sold  for  them,  equaled  sixty 
per  cent  of  the  commissions  so  paid. 


farmers'  and  people's  exchanges. 


225 


In  other  words,  in  the  first  seven  months,  with  only 
125,000  cash  capital,  cooperation  enabled  cattle  men  to 
sell  their  stock  at  an  expense  of  only  forty  per  cent  of 
the  usual  charges,  on  top  of  which  they  got  oyer  one 
hundred  per  cent  per  annum  interest  on  their  capital, 
besides  accumulating  a  small  reserve  ! 

With  such  a  showing,  no  wonder  the  cooperators 
increased  their  authorized  capital  to  $250,000  in  Janu- 
ary, 1890, — of  which  a  total  of  $49,000  was  paid  up, — 
and  went  in  for  a  more  extensive  business.  They  got  it, 
too,  as  thus  appears  : 

business  of  AMERICAN  LIVE     STOCK  COMMISSION  COM- 
MISSION  COMPANY   FOR   YEAR    ENJ)ED    DEC.   1,  1890. 

THE  DETAILS  OP  THE  SHIPMENTS. 


Chicago  house 

Kansas  City  house 

St.  Louis  liouse 

Omaha   


Totals . 


ffil  "o^- 


3,710  904 

5,0G5  84,786 

531  2,736 

497 i  22,272 


9,8091   110,698 


Sli'ep 


3,246 

2,752 
277 


6,275 


Calves.\  Cattle. 


Commis- 
sion. 


5,720,  83,662;  $40,642.00 

14.873'  89,138  50,077  12 

2,1971  11,340  6,150.15 

93  3,888  3,871.70 


22,8831   188,0281   $101,346.97 


DIVISIONS  AS  TO  MEMBERSHIP. 

Stockholders 

7,607 

1,034 

968 

164 

3 

66 

37.821 
2.5,530 
37,387 

8,5C6 
66 

1,328 

3,914 

1,297 

992 

21,934 

832 

112 

5 

161,975 

15,685 

9,254 

857 

38 

219 

$82,686.27 

9,449.30 

7,787.50 

1,161.50 

25.00 

Kansas  Alliance  

Nebraska  Alliance 

F.  M.  B.  A.  of  Illinois 

Kansas  State  Grange 

72 

237.40 

Totals  

9,809 

110,698    «''!'7R 

22,883 

188,028 

$101,346.97 

' 

Over  Two  and  One-Half  Million  Dollars  was  the 

aggregate  of  the  sales  made  during  the  year, — the  largest 
business  of  any  single  cooperative  society  in  America. 
The  commissions  on  these  sales  were  over  $101,000,  of 
which  only  $31,000  was  required  for  expenses  and  re- 
serves. Thus  the  actual  cost  of  transacting  the  business 
was  only  one  per  cent  of  the  gross  sales.  What  per  cent 
is  filched  by  the  monopoly  exchanges  from  the  cattle 
men  who  haven't  **sand"  or  brains  enough  to  cooperate  ? 
15 


226  HOW   TO   COOPEEATE. 

Divided  in  the  usual  manner,  the  profits  of  1890 
equaled  fifty  per  cent  interest  on  capital,  and  fifty  per 
cent  dividend  on  commissions  ! 

All  history  affords  no  parallel  for  such  results  by 
cooperation. 

The  Men  Who  Make  This  Success. — No  ** spring 
chicken  "  is  at  the  head  of  such  an  unprecedented  suc- 
cess. No  mere  rancher  without  business  experience  has 
the  ability  or  nerve  to  conduct  an  enterprise  of  this  kind 
in  the  teeth  of  the  fiercest  commercial  and  legal  opposi- 
tion the  country  has  ever  known.  The  general  manager 
is  Eli  Titus,  a  native  of  Indiana,  but  long  a  resident  of 
Kansas,  and  identified  with  her  cattle  interests  for  twenty 
years,  both  in  ranching  and  feeding.  He  was  live  stock 
agent  of  the  Atchison,  Topeka  and  Santa  Fe  railroad 
for  several  years.  He  is  master  of  his  business  and  a 
typical  Western  rustler,  as  his  picture  shows. 

The  president,  H.  W.  Cresswell,  was  a  native  of  Can- 
ada, but  for  years  has  been  a  resident  of  Colorado  and 
the  West,  being  known  everywhere  as  one  of  the  largest 
and  most  successful  ranchmen.  He,  himself,  shipped 
and  marketed  10,480  head  of  cattle  last  year.  Mr. 
Cresswell  is  an  energetic  and  vigorous  worker  for  the 
success  of  codperative  cattle-marketing,  and  uncompro- 
mising for  whatever  he  believes  to  be  right.  Edwin 
Snyder,  the  live  stock  agent  of  the  Kansas  Alliance 
Exchange  Company,  which  is  a  shareholder  in  the  com- 
mission company,  has  also  been  an  important  factor  in 
its  success.  Moving  from  Ohio  twenty-five  years  ago, 
he  has  a  large  farm  at  Oskaloosa,  Kansas,  and  has  long 
been  an  earnest  student  of  cooperation  and  worker  in 
cooperative  enterprises.  He  is  an  urgent  advocate  of 
self-help  through  cooperation  as  sure  to  benefit  farmers 
and  the  public  generally  far  more  than  the  much-dis- 
cussed socialistic  schemes  of  the  day.  In  other  words, 
he  believes  people  will  do  best  to  help  themselves. 


FARMEES'   AND    PEOPLE'S   EXCHANGES.  227 

THE    HAMMONTON,    NEW   JERSEY,    FRUIT    GROWERS'   UN- 
ION  AND   COOPERATIVE   SOCIETY,    LIMITED. 

A  Typical  Farmers'  Exchange. — Useful  as  are  the 
foregoing  accounts  in  this  chapter,  we  regard  the  society 
and  methods  now  to  be  treated  as  even  more  worthy  of 
attention  because  typical  of  the  form  of  cooperation  that 
seems  peculiarly  adapted  to  the  ordinary  farming  com- 
munity. It  is  a  plan  whereby  the  earnings  of  coopera- 
tive marketing  of  produce  can  furnish  capital  for  coope- 
rative distribution,  with  all  its  attendant  benefits.  It 
will  work  in  any  part  of  the  country,  with  proper  man- 
agement, and,  like  the  cooperative  store  in  the  city,  is 
the  foundation  upon  which  to  rear  the  substantial  suc- 
cess of  distributive  cooperation,  with  its  powerful  union 
of  local  stores  and  exchanges  supporting  and  being  fed 
by  a  wholesale  society  with  ample  capital. 

The  Evolution  of  this  Society  shows  how  all  asso- 
wated  effort  must  result  in  real  cooperation  to  amount 
to  anything.  The  fruit-growers  about  Hammonton,  in 
South  Jerse}^,  had  formed  a  rude  union  in  1867,  which 
for  seventeen  years  was  better  than  nothing,  as  it  brought 
ihe  farmers  together  at  least  once  a  year,  helped  some- 
what in  marketing  facilities,  and  to  some  extent  in  buy- 
ing heavy  supplies  in  bulk.  Early  in  the  eighties,  ar- 
rangements were  made  with  commission  merchants  in 
the  larger  cities  to  handle  the  Union's  fruit  on  the 
method  later  imitated  by  the  California  Fruit  Union,  as 
narrated  on  Pages  215-221.  This  gave  the  society 
a  little  capital,  and  the  question  was  what  to  do  with  it. 
Z.  U.  Matthews,  E.  K.  Sproul,  and  others  who  had 
studied  into  cooperative  distribution,  wisely  discerned 
that  if  the  money  from  this  source  was  invested  in  a 
cooperative  store  it  would  not  only  save  money  for  farm- 
ers on  all  they  bought  through  the  store,  but  would  hold 
their  interest  the  year  through,  thus  overcoming   the 


238 


HOW  TO  COOPERATE. 


farmers'  and  people's  exchanges.  229 

weak  points  that  later  brought  dissolution  to  the  once 
powerful  Delaware  Fruit  Exchange  (Page  214). 

The  members  saw  the  wisdom  of  this  course,  and  re- 
organized Feb.  16,  1884,  as  the  Fruit  Growers'  Union 
and  Cooperative  Society,  Limited,  being  incorporated 
under  the  cooperative  law.  The  certificate  of  association 
specifies : 

Tlie  objects  of  this  society  shall  be  to  arrange  the  methods  for  ship- 
ping and  selling  fruit  and  other  products  of  the  soil,  and  to  protect  the 
interests  of  shippers;  to  conduct  a  store  for  the  sale  of  general  mer- 
chandise, to  its  members  and  others ;  to  purchase  and  hold  such  real 
estate  as  may  be  needed  to  conduct  its  business,  and  to  sell  any  portion 
of  the  same,  when  In  the  opinion  of  its  officers  such  sale  is  desirable. 

Tlie  capital  stock  of  the  society  shall  be  $50,000,  which  shall  be  divided 
into  10,000  shares  of  the  par  value  of  Ave  dollars  each.  Stock  may  be 
issued  to  members  In  payment  of  any  dividend  made  from  profits 
accruing  from  slilpments  or  sales  of  fruit  or  produce ;  each  share  so 
Issued  must  be  paid  up,  but  fractional  sums  of  such  dividend  may  be 
made  up  to  a  full  share  by  the  member  to  whom  it  is  due,  may  be  cred- 
ited to  his  account,  or  may  be  paid  to  him  in  cash  at  the  option  of  the 
officers  of  the  society.  Shares  may  also  be  sold  for  cash  at  their  par 
value,  whenever  the  officers  may  deem  it  expedient,  but  the  par  value 
of  such  shares  must  be  paid  when  thtis  sold. 

Any  person  satisfactory  to  the  officers  may  become  a  member  by 
paying  an  entrance  fee  of  one  dollar,  subscribing  for  one  or  more  shares 
of  stock,  and  agreeing  to  the  provisions  of  this  certificate  and  the  by- 
laws of  the  society,  but  no  member  shall  hold  office  or  be  entitled  to 
vote  at  any  election  who  has  not  had  at  least  one  paid-up  sliare  of 
stock. 

Annual  interest  at  the  rate  of  six  per  centum  shall  be  paid  to  share- 
holders, and  a  sum  equal  to  five  per  cent  of  tlie  net  profits  shall  be  set 
aside  annually  for  a  contingent  fund  and  safely  invested  by  the  board 
of  directors.  The  balance  of  the  profits  of  the  society  shall  be  com. 
puted  at  the  end  of  each  year  by  the  board  of  directors  and  a  dividend 
declared  and  paid  to  members  and  purchasers  of  such  portion  of  said 
profits  as  such  board  may  deem  consistent  with  the  Interests  and  safety 
of  the  society,  provided,  that  purchasers  who  are  not  members  sli.ill 
receive  one-half  the  rate  of  dividend  paid  to  members.  Profits  derived 
from  the  sale  of  merchandise  may  be  paid  in  goods  or  In  cash,  as  the 
board  of  directors  may  determine. 

Shareholders  and  Capital. — It  appears  from  tlie 
above,  and  from  the  by-laws  printed  in  the  Appendix, 
that  the  society  is  organized  on  purely  cooperative  lines, 
but  has  jealously  confined  its  actual  membership  to 
farmers  and  fruit-growers,  although  allowing  the  general 
public  to  trade  at  its  store.      Outsiders  can   become 


230  HOW  TO  CO6PEBATB. 

"members"  by  paying  the  dollar  entrance  fee,  but  only 
fruit-growers  can  become  shareholders.  The  profits  of 
the  shipping  department  and  the  dividends  on  shippers' 
commissions  are  payable  in  shares  of  the  society,  no 
shares  being  sold  for  cash.  This  keeps  the  concern  in 
the  farmers'  hands,  and  at  the  same  time  provides  capi- 
tal without  exertion  from  the  farmers,  for  the  receipts 
of  the  shipping  department  actually  came  out  of  the 
commission  merchants  who  handle  the  fruit.  (See  Page 
219  on  this  point.) 

Buildings  and  Equipment. — The  profits  from  the 
shipping  business  of  1884,  some  $1,500,  were  used  to 
erect  a  cheap  warehouse,  that  is  shown  in  the  corner  of 
Fig.  33.  There  was  a  driveway  through  it  (with  plat- 
form scales),  either  side  of  which  was  partitioned  off  for 
feed,  fertilizers,  flour  and  other  heavy  supplies,  as  no 
one  then  dreamed  of  the  society  carrying  a  stock  of  light 
goods.  A  small  corner  was  partitioned  off  for  an  office, 
used  mostly  by  the  clerks  in  charge  of  the  shipping  of 
fruit.  The  Pennsylvania  railroad  was  not  accommodat- 
ing, but  upon  the  advent  of  a  competing  line  (the  Bead- 
ing) a  switch  track  to  the  warehouse  was  secured  ;  an- 
other for  cars  being  loaded,  and  a  third  for  unloading. 
Then  a  coal  and  wood  yard  was  added,  with  an  elevated 
switch  track.  Fruit  shipments  increased,  and  a  large 
ice  house  was  required  for  cold  storage  in  transit.  More 
room  being  needed  in  the  warehouse,  a  special  fertilizer 
house  was  built  near  the  ice  house, — both  next  to  the 
tracks.  Business  began  to  gravitate  to  this  spot,  and 
the  society  built  a  blacksmith  and  wheelwright  shop, 
which  was  rented  to  good  workers  in  these  lines.  Exten- 
sive horse  sheds  are  provided. 

Soon  the  members  began  to  call  for  pins,  and  other 
light  household  supplies,  a  stock  of  which  was  gradually 
added.  Each  year  trade  and  stock  increased,  until  in 
1890  a  fine  store  was  built  on  directly  in  front  of  the 


FAKMEES'   AKD   PEOPLE'S  EXCHANGES. 


231 


old  warehouse.  This  is  a  splendid  three-story  structure 
40x60  feet,  with  a  cellar  under  the  whole,  which,  with 
the  old  part,  gives  a  total  length  of  144  feet.  A  front 
view  appears  in  Fig.  30,  and  the  various  departments 


Fig.  31.    Plan  of  Fibst  Floob  ok  the  Hammonton  Stobe. 
The  Narrow^Part  Is  the  New  Store,  a  Front  View  of  which  Appears  in 
tlie  Preceding  Illustration;   the  Wider  and  Longer  Part  is  the 
Original  Building,  a  Separate  Picture  of  which  is  given  in  the 
Upper  Comer  of  Fig.  33. 

are  outlined  in  Figs.  31  and  32 ;  the  third  floor  of  the 
new  part  is  used  for  storage  and  a  workshop.  It  will  he 
seen  that  the  store  carries  a  complete  line  of  everything 
required  to  supply  the  wants  of  both  farmers  and  vil- 


[ 


^ — V.       o'L'croTM 

tMPUM 

JXATRESSES     e 

FEED    BINS 

Lv  -V 

EARXHENWARl 

CROCKED 

MARNtlSStS 

sr(Sts 

^WOCER^' 

PlO.  82.     ABBANGEMENT  OF  SECOND  FLOOB. 

lagers  and  their  families.     The  location  is  not  far  from 
the  passenger  depots  of  the  two  railroads. 

The   Growth   of  the   Business  is  such  that  from 
May  to  September  a  special  engine,  furnished  by  the 


232 


HOW  TO   COOPERATE. 


railroad,  is  required  to  switch  the  cars  handled.  Ship- 
ments of  fruit  run  from  one  to  fifteen  carloads  daily, 
from  two  million  to  three  million  quarts  of  berries  being 
forwarded  per  season,  tons  of  grapes,  and  many  bushels 
of  pears.  Other  produce  is  handled  in  a  small  way,  but 
fruit  is  the  great  industry.  The  developments  of  the 
different  phases  appear  at  a  glance  in  this  table  : 

COMPARATIVE  STATEMENT  OF  THE  HAMMONTON  SOCIETY.t 


Assets,  gross 

Liabilities 

Assets,  net 

Sinking  fund 

Gain  in  store 

Gain  in  shipping  dep't.. 

Total  profits 

81  ore  receipts 

Store  expenditures 

Store  profits 

Shipping  receipts 

Shipping  expenses 

Shipping  profits 

Shares  sold 

Shares,  total  issued 

Members  added 

Membei-s  withdrawn 

Total  No.  of  members... 

Bills  receivable     

Dividends  paid 


1890. 


$51,050 

15,016 

36,034 

2,004 

7,065 

4,365 

11,430 

132,791 

125,726 

7,065 

7,413 

3,048 

$4,365 


3,390 
51 


619 

$13,074 

7,816 


1889. 


$39,790 

7,354 

32,436 

1,501 

5,281 

4,774 

10,055 

116,639 

111,358 

5,281 

8,252 

3,478 

4,774 

1,038 

3,404 

50 

2 

468 

11.415 

3,785 


1888.  I  1887.  1 


$35,845 

9,679 

26,166 

961 

4,993 

6,817 

11,810 

110,129 

105,136 

4,993 

6,928 

3,111 

6,817 

566 

2,407 

87 


420 
9,790 
3,427 


$23,149 

6,027 

17,122 

621 

*6,803 


6,802 
76,790 
72,862 
3,921 
6,048 
2,167 
2,881 
520 
1,841 
52 


333 
5,049 


1886. 


$15,993 

3,452 

12,541 

379 

4,444 


2,105 

*53,616 

♦51,501 

*2,105 


364 
1,321 


281 
2,156 


1886. 


$9,454 

1,357 

8,454 

133 

2,652 


712 
♦32,752 
♦32,040 

♦712 


479 
985 
30 


233 

418 


tSllght  inaccuracies  are  due  to  omissions  of  cents.     ♦Includes  both 
store  and  shipping  departments. 

Explanatory  Notes — Since  1886  the  accounts  of 
the  store  and  of  the  shipping  department  have  been  kept 
separate,  so  that  the  profits  of  the  former  might  go  to 
purchasers,  while  the  profits  of  the  shipping  department 
are  reserved  to  furnish  capital.  Some  fears  have  been 
expressed  that  the  growth  of  the  store  might  lead  to 
neglect  of  the  marketing,  but  this  has  not  proved  so, 
nor  is  it  likely  to,  since  the  fruit-growers  only  are  share- 
holders. The  increase  in  assets,  business,  profits  and 
membership  is  most  gratifying.  The  bills  receivable 
show  that  some  credit  is  given,  but  great  care  is  exer- 
cised, credit  being  given  only  to  shareholders  whose 
shares  or  shipping  dividends  are  good  secunty.  The 
figures  show   that  the  percentage  of  credit  sales  has 


FAKMEBS'  AND    PEOPLE'S  EXCHANGES. 


233 


slightly  increased, — a  tendency  that  should  be  stopped. 
The  sinking  fund  is  invested  in  a  building  association. 
Great  care  is  exercised  to  secure  a  fair  and  equitable 
adjustment  between  the  two  departments  of  the  ex- 
change. The  directors  get  $35  a  year  for  their  services, 
and  are  fined  $1.50  for  every  absence  from  meetings. 
These  salaries  are  divided  between  the  two  departments. 
All  rents,  including  the  rent  of  the  store,  go  to  the  ship- 
ping department,  as  it  is  practically  the  owner  of  the 
busitiess.  Nothing  is  allowed  for  depreciation  of  build- 
ings, but  this  is  offset  by  the  increased  value  of  the  real 
estate,  which  is  worth  fully  $1,500  more  than  it  stands 
for  in  the  assets.  The  store  receipts  and  expenditures 
stated  above  include  stock,  cash  and  bills  on  hand,  as 
well  as  actual  sales,  the  latter  last  year  being  just  about 
$100,000  (1890),  of  which  eighty-four  per  cent  was  to 
shareholders  and  the  rest  to  the  outside  public.  These 
points  will  appear  still  clearer  from  the  following : 

ANNUAL    STATEMENT  (HAMMONTON)   FOR    1890. 

CASH  ACCOUNT. 


Jan.  1, 1890,  On  hand 

Rec'd  dur'g  year. 

$395.29 
127,103.15 

Dec.  31, 1890,  On  hand... 
Paid  dur'g  year.. 

$989.78 
126,508.66 

GENERAL  STATEMENT. 

ASSETS. 

$19,712.12 

13,038.61 

73.75 

2,035.15 

557.00 

835.32 

12,538.56 
989.78 

LIABILITIES. 

Interest  due  on  capital . . . 
Unpaid  sliipping  dlvld'd 
Unpaid  store  dividend... 

Unpaid  store  bills 

Sundry  bills  payable 

Total  liabilities i 

$1,171.56 

56.01 

866.12 

972.61 

11,949.75 

Due  on  accounts .  7,955.67 

Due  on  notes 5,133.41 

Due  on  mortg's...  1,219.43 

Sawdust 

Sinking  fund  net. 
Track  scales 

^15,016.05 
,1890. 
$36,034.14 

Fixtures  less  10% 

Jan.  1, 1890 

3i  acres  of  land . .    612.25 
Store    w  i  t  li    i  m- 

provements 3,895.44 

Dwell'g  &  1  acre.  1,100.00 
Fertilizer  house . .    299.47 

Horse  sheds 240.00 

Cloal  dumps 740.00 

GAIN  IN  ASSETS,  DEC.  3 

Net  assets 

Net  assets,  Dec. 
31,1889 $32,419.68 

Less    store   divi- 
dend, $3,524.78  . 

Less  shipp'g  div- 
idend, $4,290.80.     7,815.58 

Blacksmitli  sliop.    625.00 

New  store 4,169.78 

Cash  on  hand 

$24,604.00 

Net    profits   of 
store,  1890 7,065.22 

Net  shipping  de- 
partment       4,364.92 

Total  assets 

$51,050.19 

36,034.14 

234 


HOW  TO   COdPERATE. 


ACCOUNT  WITH  THE  STORE. 


EXPEXSE8  (OB  CBED 

Jan.  1,1890,  Inventory.... 
Book  accounts  due . . 
Notes  on  hand 

[TOR). 

$17,475.51 
8,740.05 
3,341.39 
1,000.00 

835.32 
83,717.72 

143.75 

4,584.79 

4,188.31 
51.47 
554.65 
218.43 
641.77 
535.72 
360.00 

7,065.22 

RECEIPTS  (OR   DEBTOR). 

Dec.  31,  1890,  inventory..     $19,712.12 
Book  accounts 7,940.66 

Mortgages  on  hand. . 

Fixtures $617.80 

Fixtures     bought 
in  vear 217.52 

Due  on  mortgages 1,219.43 

Fixtures  on  hand 835.32 

Casli  on  unpaid  bills  at 

last  reports 2,365.97 

Casli  on  sales 93,921.57 

Mercliandise  bouglit 

Atiditors  and  directors 

(one-half) 

Freight  paid  during  the 

year 

wages  paid  during  the 

year 

Advertising 

Interest  on  capital  st'k. 
Taxes  and  insurance.. .. 

Store  expenses 

Bank  discount 

Interest  and  discount. . .           722.20 

Net  profit  to  balance.. . . 

Total 

$132,791.10 

Total $132,791.10 

ACCOUNT  WITH  THE  SHIPPING  DEPARTMENT. 


PAID  (OR  CREDITOR). 

Auditors    and    directors' 

salaries  (one-half) $143.75 

184.49 
230.00 
130.34 
466.55 
15.54 
40.00 


Sundry  expenses. 

Ice  . . .'. 

Insurance  and  taxes 

Interest  on  capital 

Repairs 

Claims  for  losses 

Printing    and   delivering 

dispatclies 

Secretary's  salary$150.00 

Clerk  hire 370.08 

Wages  of  loaders.  517.10 
Superintendent..  233.86 
Agent 210.94 

Net  profits  to  bal. . . 


382.61 


1,481.97 
4,364.92 


Total $7,413.17 


RECEIVED  (OR  DEBTOR.) 

From    commission    mer- 

cliants $5,166.77 

Railroad     company,     re- 
leased freiglit* 1,585.87 

Railroad  company,  clerk 

liire 105.00 

Membership  fees 51.00 

Rent  of  store 360.00 

Rent  of  blacksmith  sliop.  15.01 

Rent  of  dwelling  house. . .  96.00 

Fines  for  absence 4.50 

Sale  of  old  crates 4.32 

Sale  of  pickers'  ticketst . .  24.70 


Total $7,413.17 


•Rebate;  now  done  away  with  and  made  up  in  lower  rates.    tCom- 
miflsion  on  sale  of  railroad  tickets  for  transportation  of  berry  pickers. 

The  Store  Management  aims  at  selling  absolutely 
pure  and  honest  goods  at  fair  retail  prices.  At  the  start 
the  local  merchants  charged  extravagant  prices,  which 
the  **  Coops  "cut  quite  savagely  to  get  the  business — a 
mistake  that  it  is  hard  to  recover  from,  and  which  has 
limited  dividends  to  six  per  cent. 

The  working  force  includes  a  general  manager,  a  book- 
keeper, one  cashier,  seven  male  clerks  and  two  female 


FARMEKS'   AND   PEOPLE'S   EXCHANGES. 


235 


236  HOW   TO   COOPERATE. 

clerks,  and  one  or  two  horses  are  used  in  the  collection 
and  delivery  of  orders.  An  approved  system  of  handling 
the  cash  is  adopted,  similar  to  the  system  in  big  city 
stores,  and  much  like  that  of  the  Arlington  society  ex- 
cepting that,  in  lieu  of  checks,  patrons  get  a  slip  con- 
taining the  names,  prices  and  amounts  of  the  articles 
they  purchase.  Duplicates  of  all  these  slips  go  to  the 
ct:^hier,  who  handles  all  money  and  makes  all  payments, 
and  whose  cash  registering  machine  is  a  further  check. 

The  bookkeeper  has  no  connection  with  the  cashier. 
He  makes  a  daily  record  in  a  memorandum  book  of  the 
amount  of  each  slip  turned  in  (to  the  cashier  and 
stamped  by  him)  by  each  clerk,  the  cash  sales  entered  in 
black  ink  and  the  credit  sales  in  red.  This  record  has 
to  tally  with  each  clerk's  report.  The  lump  sum  of  the 
cash  sales  are  transferred  direct  to  the  cash  book  daily, 
while  the  charges  against  members  are  posted  up  from 
the  individual  slips  into  a  ledger.  The  store  preserves 
its  slips  and  so  does  the  member,  so  that  each  party  has 
a  check  on  the  other  and  the  auditors  a  double  check  on 
all  employes.  A  trial  balance  book  is  kept,  from  which 
reports  are  made  up  for  the  monthly  meetings  of  the 
directors.  It  contains  a  statement  of  all  bills  paid  under 
their  respective  headings,  the  cash  receipts  in  the  differ- 
ent departments  and  a  statement  of  the  balance  due 
from  members.  In  a  dividend  book  are  posted  up  the 
monthly  totals  of  the  purchaser's  slips,  the  quarterly 
dividend  on  which  is  credited  on  his  account  if  he  owes, 
or  otherwise  is  paid  in  cash.  The  journal  carries  the 
total  of  accounts  which  are  posted  under  their  respective 
headings  in  the  ledger,  the  system  being  common  double 
entry. 

The  store  has  had  to  meet  with  the  usual  amount  of 
misrepresentation  and  opposition  from  the  other  dealers. 
This  has  been  particularly  savage  because  the  store  un- 
dertakes to  carry  all  lines  of  goods.     The  usual  amount 


FARMERS*   AND    PEOPLE'S  EXCHANGES.  237 

of  lies  and  rumors  against  it  are  constantly  circulated, 
which  are  not  without  effect  on  the  weak-kneed.  As  a 
rule,  however,  to  their  credit  be  it  said,  the  members 
are  well  satisfied  and  loyal.  The  business  is  not  confined 
to  Hammonton,  but  members  and  patrons  come  from 
other  towns.  So  great  is  its  success  that  there  is  a  con- 
stant pressure  from  distant  patrons  to  open  branch  stores 
in  other  townships. 

The  Shipping  Department  is  supported  by  the 
three-tenths  rebate  paid  it  by  the  produce  merchants 
out  of  their  ten  per  cent  commission  on  sales.  These 
agents  remit  direct  to  the  shippers  the  net  amount  re- 
ceived for  each  person's  shipment  less  commission, 
freight  and  cartage,  a  duplicate  of  each  account  being 
sent  to  the  Union  also  with  check  for  its  three  per  cent 
rebate.  The  business  is  not  large  enough  to  bring  the 
buyers  to  Hammonton  and  thus  enable  the  Union  to 
sell  its  produce  on  the  spot,  as  the  Delaware  Fruit  Ex- 
change was  able  to  do — the  perfect  system.  (See  Page 
213.)  A  superintendent,  two  clerks,  five  loaders  and 
six  dispatch-carriers  are  employed  during  the  shipping 
season. 

The  contract  with  city  commission  men  provides  that 
they  shall  report  all  sales  by  wire  immediately.  Thus 
Monday's  shipments,  sold  early  Tuesday  morning  in 
Philadelphia,  New  York  and  Boston,  are  reported  at 
the  special  telegraph  office  in  the  union  store  at  Ham- 
monton by  half  past  nine  o'clock  Tuesday  morning. 
These  reports  are  rushed  to  the  printing  office  and  by- 
eleven  o'clock  are  printed  in  the  form  of  a  daily  bulletin, 
which  also  contains  any  notices  to  shippers  or  commis- 
sion merchants  that  the  officials  of  the  Union  wish  to 
make.  As  soon  as  off  the  press  the  bulletins  are  distrib- 
uted by  boys  on  bicycles  or  horseback  to  every  member 
of  the  Union,  some  of  whom  are  five  miles  distant. 
Thus  by  dinner-time  every  fruit-grower  in  the  neighbor- 


HOW  TO   COOPERATE. 


hood  who  is  a  member  of  the  Union  knows  jast  how  the 
markets  were  that  morning,  and  can  make  up  his  mind 
which  markets  he  will  consign  to  on  the  trains  going 
out  in  the  afternoon.  This  exceedingly  valuable  service 
costs  the  union  about  four  hundred  dollars,  or  about 
seventy-five  cents  per  member,  and  is  well  worth  it.  A 
copy  of  the  bulletin  is  put  in  the  berry  crate  containing 
freight  manifest  that  goes  with  each  shipment  to  every 
agent.  This  very  practical  and  valuable  feature  will  be 
better  appreciated  by  reprinting  a  sample  copy. 

DAILY   BULLETIN. 

Published  by  the  Fruit  Growers'  Union 

And  Cooperative  Society,  Limited. 

Republican  Print.  Hammonton,  N.  J. 

Time  for  Iteceipt  of  Berries. 

For  Boston,  Providence,  Scranton.  and  point* north  of  New  York:  from 

Union  Depot  at  8.00  A.  M. :  from  Elm,  8.45. 
For  New  York  and  Newark  :  tfnion  Depot,  5.50  P.  M. ;  Elm,  6.15. 
For  Plilladelphia:  Union  Depot,  7.50  p.  M. ;  Elm,  7.00. 
Train  on  Sea  Isle  City  Road  will  leave  Folsom  at  5.00  P.  M.,  connecting 

with  New  York  and  Philadelphia. 

Vol.  XI,  Tuesday,  June  30,  1891.  No.  30 

Boston. 

Bigelow  &  Co.    Del.  Blacks  selling  15-18    prospect  good  for  fine  stock 

Rice  &  Hoi  way.    Del.  Blacks  sold  to-day  10-12    ^eds  pints  6 

Kimball  &  Co.    Reds  good  order    sold  pints  8    Del.  Blanks  selling  14-15 

New  York. 

Combes  &  Co.    Reds  pints  5-6    Caps  7-8    ffucks  12-14 

Cole  &  Co.    Caps  quarts  7-8,  pints  4    Reds  pints  6-8 

Bogart  &  Son.    Sold  Reds  quarts  8-12    Caps  6-8 

Funnan  &  Co.     Caps  sold  3J-4    Reds  5-6  pints 

W.  L.  Snyder.    Reds  pints  5-6    Cups  4,  quarts  7    selling  good 

Melick  &  Co.    Reds  5-&    Caps  4    pints    gowl  demand 

Wygant.    Reds  pints  5     Caps  pints  4,  quarts  7    Blacks  9-10 

I>hiladelphia. 

Adams.    heds9-i0    Caps  5-6    Blacks  \0    Early  Harvest 

MeCully  &  Co.    Reds  8-12    Caps  5-7    Blacks  10-15    Better  to-morrow 

Mover  &  Co.    Reds  10-12,  five  crates  8    Caps  5-7    Blacks  15 

Sit  ley.    Caps  5-6    Reds  8-12,  mostly  10 

Hhillingsburg&Co.    8o\d  Reds  4-5    Caps  3  Blacks  12    Blacks  10 

Batten  «&  Co.    Caps  6,  few  4    lleds  8-12    quarts    Hucks  12 

Redfield  &  Son.     Caps  sold  5-6    Reds  8-12    quarts    Hticks  15 

Mcl><>ugal  Bros.     Reds  sold  8-12    Caps  5-6 

Kienzle.    Reds  8-12,  mostly  10    Caps  5-6    out    demand  good. 

Cahall  &  Baynard    All  sold    HedsU-S    Caps  5 

H.  B.  Smith  &  Co.    Reds  12-14,  few  10    Caps  6-7    Hucks  12    Blacks  11 

Wescoat.    Caps  5-6    Reds  8-12    Hucks  12    out    ship  heavier 

R.  P.  Stewart  &  Co.    Reds  12-10,  four  crates  8    Caps  6,  three  crates  4 


FAEMERS'  AND  PEOPLE'S   EXCHANGES.  339 

Roberts  &  Andrews.    Sold  Reds  9-10    Corps  5    quarts    demand  good 
Emley.    Strawberries  5-7    Reds  8-14    Caps  5-6    out 
Sawyer  &  Co.    Reds  8-10    Caps  5-6    quarts 
Wick  &  Bro.    Sold  Reds  9-12    Caps  6-7    Blacks  10 
Conway  &  Co.    Caps  3-4    ^eds  4-6 

Newark. 

Debow  &  Co.    Caps  pints  3-4    Reds  7-8 
Kaiser    Cops  pints  4-6,  quarts  8    iJeds  pints  7 
McNair.    Caps  sold  4    /feefs  5-7    piuts    mostly  small  and  poor 
Pittsburgh. 
Baxter  &  Renton.    Raspberries  scarce  10-12    Blackberries  same 

Sliip  early  train 

Ship  for  Boston  and  other  eastern  points  this  afternoon.    Closing  time 

same  as  for  New  York,— 5.50  at  Union  ;  at  Elm,  6.30. 
No  shipments  Sunday  by  freight  or  express.    You  can  ship  to  Philadel- 

ghia  by  express   Monday  morning  at  5.00  o'clock,  from  Twelftli 
treet.    Car  will  be  placed  and  berries  received  Sunday  afternoon. 
The  following  names  have  been  added  to  the  list  of  Commisison  houses: 

Albert  Adams  and  Nock,  Whealton  &  Co.,  both  of  Pliiladelphia. 
We  expect  to  have  Refrigerators  for  Philadelphia,  New  York  and  Bos- 
ton, Saturday   afternoon.    They  will  be  iced  so  that  they  can  be 
loaded  any  time  during  the  day  on  Saturday. 

NOTICE  TO  ELM  SHIPPERS.    On  and  after  this  date  the  closing  time 

at  Elm  for  Philadelphia  will  be  7  o'clock. 
The  Boston  train  will  go  on  to-morrow — Wednesday — July  1st.    There 

will  be  a  Refrigerator  for  Boston.    |!^°"Remember  tliat  the  closing 

time  for  this  train  is  Eight  o'clock,  sharp.    You  MUST  be  on  time 

for  the  Boston  train ;  we  cannot  hold  it. 
A  REQUEST.— Commission  merchants  would  prevent  possible  errors  if 

in  their  telegrams  they  would  designate  Black  Caps  as  Caps;  Red 

Raspberries  as  Reds;   Blackberries  as  Blacks;  Huckleberries  as 

Hucks.    Please  use  these  convenient  terms, 

And  oblige  THE  PRINTER. 

The  Lessons  of  it  All. — The  people  and  locality 
are  not  specially  adapted  to  cooperation.  There  is  not 
as  much  social  intercourse  among  these  people  as  is  com- 
mon in  many  other  places.  The  farmers  are  mostly 
intelligent,  but  not  extraordinarily  so.  The  presence  of 
an  increasing  number  of  Italian  farmers  would  also 
appear  to  be  unfavorable  to  the  effort,  but  does  not  prove 
so.  One  of  the  directors  is  an  Italian,  and  a  level-headed 
farmer  and  fruit-grower  he  is.  E.  K.  Sproul  has  been 
the  president  and  Z.  U.  Matthews  the  secretary  and 
manager  from  the  start,  both  being  practical  farmers. 
Mr.  Matthews,  who  adorns  our  frontispiece,  had  some 
mercantile  experience  before  he  went  to  farming.  The 
other  directors  are  also  farmers — L.  H.  Parkhurst, 
Charles  AUbright,  Thomas  Rogers,  H.  J.  Monfort, 
Henry  G.  Newton,  Albert  S.  Gay,  Matteo  Campanella. 


240  HOW   TO   COOPERATE. 

The  weakest  point  in  the  whole  affair  is  the  growing 
dependence  upon  the  manager,  who  is  constantly  over- 
worked. The  auditors  fail  to  do  their  duty  with  the 
searching  thoroughness  practiced  by  the  Arlington  audi- 
tors. (See  Pages  65  and  66.)  While  the  books  are 
well  kept,  an  unsparing  audit  is  specially  necessary  in  a 
country  society  to  maintain  the  esprit  du  corps  and  strict 
adherence  to  best  business  principles.  Another  weak 
point  is  the  failure  to  make  quarterly  reckonings,  the 
excuse  for  which  is  the  great  work  of  taking  an  inven- 
tory. To  this  may  be  added  the  dangers  of  the  credit 
allowed. 

No  institution  can  be  perfect,  and  aside  from  these 
points  there  is  little  to  criticise.  The  annual  reports 
printed  in  pamphleb  form  are  models  of  clearness,  and 
are  also  of  value  for  the  practical  information  they  give 
to  fruit-growers,  and  the  helpful  hints  offered  to  coop- 
erators  by  President  Sproul. 

THE  people's  exchange. 

The  feasibility  of  broadening  out  the  cooperative  store 
in  cities  and  towns,  so  that  it  shall  be  both  a  market  for 
farmers  and  surrounding  producers  as  well  as  a  center 
of  distribution  for  the  supplies  of  its  members,  is  self- 
evident.  It  would  differ  in  detail  only  from  the  asso- 
ciations previously  described,  and  therefore  need  not  be 
treated  in  full. 


CHAPTER  X. 
women's  exchanges  and  how  they  mat  be  run. 

Helen  Campbell,  the  leading  authority  on  this  form 
of  practical  cooperation  for  women,  has  written  success- 
fully for  this  work  the  following  account : 

In  the  beginning  of  work  in  this  direction  it  was 
taken  for  granted  that  only  the  largest  cities  could  afford 
a  market  for  the  articles  sent  in.  To  the  casual  obserrer 
entering  for  the  first  time  a  Woman's  Exchange,  it 
seemed  to  contain  only  masses  of  ornamental  work,  from 
a  decorated  rolling  pin,  or  boot  jack,  up  to  an  embroid- 
ered portiere,  and  the  conclusion  naturally  was,  that 
the  new  opening  for  women  was  simply  one  more  means 
for  the  dissemination  of  bric-a-brac,  and  could  be  patron- 
ized only  by  the  very  rich.  This  for  the  outward  de- 
partment, but  closer  examination  soon  showed  that  the 
real  source  of  income  lay  in  the  order  department,  with 
its  supplies  of  dainties  and  substantial  of  every  variety. 
Delicate  cake,  pastry  and  rolls  in  plain  view,  were  only 
the  suggestion  of  what  is  actually  receired  and  delivered, 
from  salads  and  pickles  to  clear  soup  jellied,  or  any 
desired  dish  beyond  the  power  of  the  ordinary  plain  cook. 

Provisions  of  this  order  are  in  demand  in  every  town, 
above  all  where  good  cooks  are  hard  to  find,  and  the 
overworked  housekeeper  would  entertain  with  as  little 
trouble  to  herself  as  possible.  This  always  increasing 
class  guarantees  a  steady  sale  for  certains  forms  of  well- 
prepared  food,  and  for  wealthier  customers,  hampered 
hardly  less  by  the  present  difficulties  of  domestic  service. 

16 


242  HOW   TO   COOPERATE. 

special  orders  for  special  occasions  increase  the  possibili- 
ties for  earners. 

For  the  history  of  individual  exchanges,  send  to  any 
one  on  the  list  in  the  appendix.  The  New  York  Ex- 
change was  the  pioneer  in  the  work,  and  has  told  its 
own  story  so  frankly  and  fully  that  each  new  comer 
knows  the  rocks  and  shoals  to  be  avoided,  and  can  send 
out  its  prospectus  with  a  clear  knowledge  of  every  vital 
point. 

Two  Sets  of  Duties  are  to  be  considered  ;  those  of 
the  organizers  of  the  Exchange,  and  those  of  the  con- 
signers. For  the  first,  much  of  the  work  is  necessarily 
voluntary,  though  the  larger  Exchanges  are  finding  it 
well  to  pay  good  salaries  to  competent  managers.  In 
such  cases  a  larger  entrance  fee  is  charged,  that  for  New 
York  being  five  dollars  a  year,  and  ten  per  cent  on  the 
price  received  for  the  goods.  Philadelphia,  where  rents 
are  far  lower,  has  an  entrance  fee  of  only  two  dollars, 
with  the  same  commission,  while  in  smaller  cities  many 
charge  but  one.  In  many  cases  the  philanthropic  com- 
mittee of  the  "Woman's  Club  hold  themselves  responsible 
for  the  first  year's  rent,  and  this  gives  a  feeling  of  se- 
curity for  the  first  few  uncertain  months.  It  has  been 
found,  however,  in  the  ten  years'  work  in  this  direction, 
that  even  the  first  year  will  often  cover  expenses,  and 
the  second  leave  a  small  surplus  for  improvement  of 
methods. 

In  a  town  of  any  size  it  has  been  found  best  to  secure 
a  whole  house,  and  make  it,  as  far  as  possible,  pay  its 
own  rent.  There  is  always  some  widow  to  be  helped, 
who  will,  for  the  rent  of  a  room  or  two,  act  as  janitor 
and  keep  halls,  etc.,  in  order,  while  the  upper  rooms  can 
be  rented  to  young  women  who  want  rooms.  This 
leaves  vacant  one  or  two  floors.  The  front  room  of  the 
first  must  be  fitted  up  with  glass  cases,  where  delicate 
work  can  be  hung  in  plain  view  yet  free  from  dust,  with 


women's  exchanges.  243 

the  usual  arrangements  of  a  counter  and  cases  upon  it 
for  the  display  of  smaller  articles.  Here  is  the  post  for 
the  business  manager,  who,  if  the  Exchange  is  small,  is 
bookkeeper,  cash  girl  and  doer-up  of  all  packages,  as 
well  as  in  charge  of  all  correspondence,  this  last  being 
the  heaviest  tax  on  time  and  patience.  Success  speedily 
allows  a  larger  force,  but  everything  depends  on  the 
quality  of  the  business  manager,  who,  after  a  clear  and 
full  understanding  with  the  various  committees  in 
charge  as  to  what  is  expected  of  her,  should  be  left 
free  and  untrammeled  by  unnecessary  suggestions  or 
interference. 

Desirable  as  it  always  is  to  have  the  premises  entirely 
under  control  of  the  officers,  a  whole  house  is  not  abso- 
lutely necessary.  On  the  contrary,  an  Exchange  can 
begin  with  only  two  rooms,  and  the  cheapest  of  shelving 
and  general  fittings,  curtains  taking  the  place  of  glass 
doors  to  cases,  and  everything  being  conducted  on  the 
principle  of  spending  not  a  cent  that  can  be  avoided. 
But  an  attractive  room  draws  custom,  and  should  be 
considered  a  necessary  part  of  the  investment;  and  to 
secure  this,  several  very  prosperous  Exchanges  have 
begun  with  a  loan  from  the  Woman's  Club,  in  form  of  a 
subscription  from  each  member,  who  looked  upon  it  as 
one  of  the  most  efficient  means  of  teaching  women  how 
to  help  themselves,  and  preferred  also  to  keep  the  entire 
machinery  for  work  in  the  hands  of  women. 

In  Prosperous  Exchanges,  almost  without  excep- 
tion, it  has  been  found  best  to  open,  in  connection  with 
the  department  of  food,  a  lunch  room,  in  which  the 
more  perishable  kinds  can  be  utilized.  Several  now 
include  a  restaurant,  and  that  for  Philadelphia  has 
incorporated  with  it  the  cooking  school,  and  plans  also 
for  a  training  school  for  domestic  service. 

All  this  is  beyond  the  first  aim  of  smaller  ones,  but 
the  lunch  room  is  perfectly  practicable.     It  requires,  in 


244  HOW  TO  COOPERATE. 

the  beginning,  simply  several  small  tables,  with  the 
linen  and  service  for  each  of  good  quality.  Pretty  china 
is  now  so  inexpensive  that  it  is  easy  to  provide  each  with 
a  service  as  attractive  as  the  home  table  offers.  Freshly- 
made  tea  in  a  little  Japanese  pot,  and  the  homemade 
rolls  and  cake,  or  bonillon,  salads  and  savories,  make  a 
lunch  far  more  desirable  than  anything  to  be  found  in 
the  ordinary  restaurant.  Often  a  certain  number  of 
business  men  agree  to  lunch  at  the  Exchange,  and  this 
is  the  nucleus  of  a  restaurant  which,  if  well  managed, 
becomes  a  source  of  immediate  profit. 

The  main  point,  and  one  never  for  a  moment  to  be 
lost  sight  of,  is  the  keeping  up  the  standard  to  the  high- 
est point  of  excellence.  It  is  far  better  to  have  a  very 
limited  bill  of  fare,  giving  certain  dishes  to  certain  days, 
and  insisting  that  each  shall  be  perfect  of  its  kind,  than 
to  have  a  long  list,  many  items  of  which  are  doubtful. 

For  a  restaurant  on  this  scale  a  cook  and  one  waiter 
are  likely  to  suffice,  and  this  cook,  who  has  to  think  of 
but  one  meal's  necessities,  is  most  often  a  consignor, 
who  finds  that  more  money  can  be  made  by  taking 
charge  of  such  a  department  than  by  simply  sending  in 
goods  for  sale. 

The  Organization. — The  duty  of  any  committees  in 
general  charge  is  to  fix  the  scale  of  prices,  draw  up  gen- 
eral rules  for  the  consignors,  and  have  oversight  of  the 
divisions  of  work.  The  usual  officers  are,  president ;  as 
many  vice-presidents  as  may  be  decided  upon,  from  one 
to  ten  being  equally  in  order ;  a  treasurer  and  assistant 
treasurer,  a  recording  and  corresponding  secretary,  and 
an  auditor.  This  is  all  voluntary  work.  There  are 
usually  standing  committees  on  nominating,  finance, 
publishing,  house,  lunch  or  restaurant,  domestic  art, 
needlework,  bureau  of  information,  etc.  Each  one  of 
these  has  its  chairman,  upon  whom,  most  often,  the 
chief  work  devolves.     That  a  good  deal  of  work  must 


womek's  exchanges.  245 

be  done  must  be  taken  for  granted,  especially  in  the 
beginning,  since  often  committees  need  education  no 
less  than  consignors,  but  every  month  lessens  difficulties 
and  brings  things  to  a  better  and  more  genuine  business 
basis. 

The  severest  and  most  trying  labor  falls  upon  the 
adjudicating  committee ;  those  on  art  needlework  and 
the  other  supplies  sent  to  the  Exchange.  So  many  sam- 
ples sent  are  poor  in  design  and  execution  that  it  re- 
quires educated  taste  as  well  as  firm  decision  to  speak 
the  full  truth,  and  refuse  to  open  with  specimens  that 
could  only  bring  discredit.  This  is,  however,  the  first 
essential,  and  no  Exchange  can  prosper  which  ignores 
this,  or  allows  place  to  inferior  work  in  any  one  of  its 
departments. 

It  is  possible,  in  the  first  beginnings  of  a  small  Ex- 
change, that  the  work  of  the  manager  of  sales  may  for  a 
time  have  to  be  voluntary.  Various  reports  record  sev- 
eral changes  of  agent  a  year,  this  arising  from  the  fact 
that  more  lucrative  employment  came  to  their  manager 
and  they  parted  with  her  because  it  was  part  of  their 
work  to  aid  women  in  this  way.  By  the  end  of  the  first 
year  the  smaller  exchanges  can,  however,  pay  a  fair  wage 
to  a  manager,  a  superintendent  of  lunch  and  her  assist- 
ant, and  a  delivery  boy,  with  provisions  for  laundry 
work  and  cleaning. 

Constant  interest,  wise  supervision,  efficient  service, 
and  contentment  with  small  profits,  added  to  the 
promptest  of  payments  to  consignors,  make  the  duty  of 
any  Exchange.  Rigid  rules  are  necessary  to  secure  these 
ends,  and  we  turn  now  to  the  demand  to  be  made  upon 
all  consignors,  with  the  general  directions  applicable  to 
all  who  forward  goods. 

The  Consignor  who  objects  to  paying  a  deposit  as 
well  as  a  percentage  on  sales  must  recollect  that  there 
are  inevitable  expenses  which,  if  not  met  in  this  way. 


246  HOW  TO   COOPERATE. 

must  be  met  by  charity.  A  yearly  fee  is  therefore  the 
only  really  self-respecting  method  to  adopt,  and  it  should 
be  paid  without  hesitation.  In  most  Exchanges  samples 
of  the  work  to  be  done  are  now  required.  This  is  an 
advantage  to  the  consignor,  who  gets  the  benefit  of  criti- 
cism on  her  work  and  is  thus  enabled  to  correct  defects 
and  reach  a  higher  standard  than  would  have  been  possi- 
ble without  it.  It  is  now  taken  for  granted  that  wax 
and  feather  flowers,  hair  and  perishable  leather  work, 
spatter  and  splinter  work  and  cardboard  are  all  unsalable 
and  cannot  be  accepted. 

Express  or  mail  charges  must  all  be  paid  in  advance, 
and  no  articles  are  now  registered  on  the  books  till  this 
is  done.  Every  article  sent  in  by  consignors  must  have 
on  it  a  tag  containing  the  name  of  article,  number  and 
price,  these  prices  being  subject  to  approval  by  a  compe- 
tent committee.  The  consignor  must  also  name  the 
lowest  price  she  will  take,  this  to  be,  in  every  case, 
respected  by  the  committee.  The  name,  address  and 
list  of  articles  sent  must  be  written  plainly  and  accom- 
pany each  consignment. 

Payments  are  generally  made  twice  a  month.  Arti- 
cles remaining  unsold  at  the  end  of  a  year  must  be 
returned  at  owner's  expense.  Woolen  goods  are  seldom 
received  on  consignment  between  June  and  October, 
though  orders  for  them  are  taken  at  any  time.  Stamps 
must  always  accompany  letters  of  inquiry,  and  consign- 
ors who  wish  articles  returned  by  mail  must  take  all  risks. 

These  are  the  general  rules  covering  consignments  in 
either  the  art  or  needlework  departments  of  any  exchange. 
In  the  domestic  departments  experience  has  compelled 
regulations  no  less  minute.  Consignors  of  preserves, 
pickles,  etc.,  must  conform  to  regular  sizes  of  jars,  tum- 
blers, bottles,  etc.,  viz.,  quarts,  pints,  half  pint  and 
quarter  pint  tumblers,  quart  and  pint  bottles.  Metallic 
covered  jars  are  no  longer  received,  glass  tops  being  in 


W0ME2S'S    EXCHANGES.  247 

all  cases  required.  Each  box  must  contain  an  invoice 
of  contents,  and  a  duplicate  invoice  must  be  sent  by 
mail.  If  fruit  is  discovered  to  be  worked  or  spoiled, 
notice  is  sent  the  consignor,  after  which  time  tho  respon- 
sibility of  the  Exchange  ceases. 

An  understanding  is  required  between  the  head  of  a 
department  and  a  consignor  as  to  when  cake  and  other 
edibles  are  to  be  considered  stale,  after  which  time  the 
Exchange  is  not  responsible.  Ingredients  of  mixed 
pickles  and  other  articles  must  be  given,  in  order  to 
make  intelligent  sales.  These  are  the  general  rules  gov- 
erning all  consignments,  and  are  the  result  of  long 
experience  as  to  the  fairest  methods  of  dealing  with  both 
customers  and  consignors. 

What  W^ill  Pay  Best. — For  consigners  themselves, 
let  it  be  understood  in  the  beginning  that  art  work  of 
any  description,  unless  of  most  exceptional  excellence, 
will  bring  but  poor  return.  It  is  perfect  cake,  preserves, 
rolls,  anything  in  the  natui'e  of  food  that  is  most  likely 
to  mean  a  good  income.  One  woman,  who  supplies  the 
New  York  Exchange  with  pies,  has  for  several  years 
made  over  a  thousand  dollars  income;  but  even  she, 
with  a  natural  gift  for  the  work,  had  to  be  taught  the 
necessity  of  making  each  batch  alike.  Women,  unless 
special  training  has  been  given,  are  apt  to  think  that  it 
makes  little  difference  if  a  batch  of  cookies  are  all  une- 
qual in  size,  even  when  to  be  sold  by  the  dozen,  and 
they  are  equally  indifferent  to  exact  proportions  of  in- 
gredients. Every  Exchange  becomes  thus  a  training 
school,  and  often  has  a  list  of  consignors  who  are  indig- 
nant at  criticism,  and  who  accuse  managers  of  favorit- 
ism and  partiality.  Managers  are  human,  and  this  may 
in  rare  cases  be  true,  though  it  is  diflScult  to  see  how, 
since  the  one  desire  with  all  is  to  see  the  best  work  in 
their  cases. 

Let  the  consignor  then  be  certain  that  her  product  is 
perfect  as  hands  can  make  it;  her  loaves  of  bread  or 


248  HOW  TO  co5pbratb. 

cake  always  equal  in  size  and  weight,  and  her  cookies  or 
small  cakes  no  less  so.  If  not  near  enough  an  Exchange 
to  visit  it  and  find  out  details  as  to  packing,  it  would  be 
well  to  remember  that  it  is  these  finishing  touches  that 
distinguish  skilled  work  from  unskilled.  It  is  perfectly 
possible  for  the  home  worker  to  learn  them  all,  and  thus 
have  the  skilled  confectioner's  finish,  with  the  flavor 
which  only  home  cooking  knows. 

When  a  business  is  made  of  it,  there  will  be  a  full  supply 
of  boxes,  cotton-batting,  "excelsior"  and  waxed  paper. 
A  beginner  who  has  not  these,  and  wishes  to  send  a  loaf 
of  cake  experimentally,  must  choose  a  box  that  has  no 
scent  of  former  contents.  The  cake  should  have  been 
baked  with  thick  paper  under  and  at  the  sides,  and  this 
is  not  to  be  removed,  as  it  will  help  to  keep  all  in  shape. 
Lay  a  sheet  of  white  paper  at  the  bottom  of  the  box  and 
place  the  loaf  upon  it.  Cover  the  top  with  another 
sheet,  and  on  this  put  a  layer  of  cotton.  Now  pack  the 
box  very  carefully  with  bits  of  old  newspapers  first,  and 
then  whole  ones,  till  it  is  impossible  for  the  cake  to 
move.  A  wooden  box  is  always  best.  If  of  paper,  it 
would  be  well  to  put  several  newspaper  layers  at  the  bot- 
tom before  laying  in  the  white  paper. 

If  small  frosted  cakes  are  to  be  packed,  follow  much 
the  same  directions.  Lay  them  in  carefully,  cover  with 
waxed  paper  and  then  with  cotton,  treating  each  layer 
in  this  way  till  all  are  in.  Excelsior  will  fill  all  the 
chinks  better  than  newspaper,  but  these  will  answer  if 
the  former  is  not  to  be  had.  Even  with  cookies  it  is 
worth  while  to  take  almost  the  same  pains,  since  a  sale 
often  depends  on  their  having  unbroken  edges  and  a 
fresh  appearance. 

Specialities  Most  Profitable. — If  possible  every 
consignor  to  a  Woman's  Exchange  should  have  some 
specialty.  The  choicer  forms  of  cake  are  always  in 
demand,  yet  most  choose  the  plainer  sorts  through  dis- 


women's  exchanges.  249 

trust  of  their  power  to  make  anything  better.  A  few 
failures  are  often  the  price  of  success,  and  what  seems 
waste  really  the  tuition  fee.  To  be  carefully  slow  and 
"fussy,"  as  some  of  the  processes  seem,  will  mean 
quicker  success  in  the  end.  There  are  various  books 
which  serve  as  aids,  notably  those  of  the  late  Catherine 
Owen,  who  made  a  specialty  of  Exchange  work.  Each 
locality  has  its  own  tastes,  and  a  visit  or  a  letter  to  the 
nearest  Exchange  will  show  what  is  most  required  there. 
Let  the  work,  of  whatever  nature,  be  as  nearly  perfect 
as  can  be  compassed,  and  there  need  be  small  fear  of  not 
receiving  a  fair  return  for  all  the  labor  expended. 

Finally,  let  the  consignor  of  preserves,  etc.,  remember 
that  the  matter  of  putting  up  is  a  most  important  one. 
A  carelessly  filled  jar  with  a  label  askew  repels  the  buyer, 
accustomed  to  the  neat  methods  of  the  professional  can- 
ner  or  preserver.  It  is  quite  worth  while,  when  well 
launched,  to  have  a  special  label,  which  must  be  gummed 
on  as  carefully  as  the  professional  ones.  Evenness  of 
quality,  such  as  distinguishes  English  jams,  pickles,  etc., 
is  one  of  the  first  necessities,  and  every  ingredient  used 
should  be  of  the  best.  Miss  Martin's  work  in  these 
directions  is  known  by  every  first-class  grocer  in  the 
country,  and  it  is  perfectly  possible  for  other  women  to 
do  equally  well. 

Two  balance  sheets  of  successful  Exchanges  are  given ; 
one  an  example  of  work  in  a  large  city ;  the  other  show- 
ing what  may  be  done  with  small  means. 


260 


HOW  TO   COOPERATE. 


ANNUAT  BBPOBT  OF  THE  PHILADELPHIA  WOMEN'S  EXCHANGE, 


RECEIVED. 

Cash  balance,  Feb.  28,  '90.  $370.10 

Needlework 7,912.26 

Art  work 8,177,77 

Domestic  department 3,400.59 

Bouillon,  coffee,  etc 139.08 

Embroidery  silks 66.47 

Rentof  rooms 1,600.80 

Consignors'  tickets 744.00 

Life  membership 60.00 

Annual  subscriptions 680.00 

Club  tickets 60.00 

Donations 821.28 

Entertainments 214.75 

Training  school  classes. . .  189.54 

Incidentals 45.75 

Fines 13.50 

Interest  on  deposits 24.62 

Ml.«!cellaneous 99.24 

Registry  bureau 1,590.50 

Table    Talk    and    House- 
keeper's Weekly 34.68 


$23,234.93 


PAID  OUT. 

Consignors $14,562.14 

Rent 3,500.00 

Salaries 2.094.17 

Furnishing  and  repairs. . .  448.87 
Stationery  and  printing..  547.46 
Table    Talk    and    House- 
keeper's Weekly 34.36 

Insurance 17.50 

Miscellaneous 108.55 

Advertising 36.20 

Telegrams 18.00 

Training  school  classes...  168.00 

Coal  and  wood 94.81 

Gas 175.20 

Lunches  of  employes 286.30 

Incidentals 207.99 

License   for   registry  bu- 
reau    50.00 

Extra  to  employes 65.50 

Cash  balance,  Feb.  8, 1891.  819.88 


$23,234.93 


ANNUAL  REPORT  OF  THE  HARLEM  (N.  Y.)  EXCHANGE. 


RECEIVED. 

Cash  balance,  April  1,  '89. . .  $96.90 

Commissions 242.25 

Subscribers  and  donors  —  870.00 

Consignors'  subscriptions..  56.50 

Gypsy  festival 625.14 

Donations 13.50 

Library 8.00 

Fines 7.55 

Register 1.00 

Interest  on  deposit 21.56 

Entertainment  at  exchange.  110.00 

$2,052.40 


PAID  OUT. 

Rent $600.00 

Salaries 791.56 

Insurance  2.10 

Fuel 22.50 

Gas 16.61 

Sundries 45.56 

Printing,  etc 28.30 

Postage 7.61 

Cash  balance,  April  1, 1890. .  538.13 


$2,052.40 


SUPERINTENDENT'S  REPORT  FROM  SALESROOM. 


May  1, 1888  to  April  1, 1889. . 
April  1, 1889  to  April  1, 1890. 


Receipts. 


$2,075.87 
2,407.16 


Year. 


Bread 
and  Cake. 


$  814.71 
1,232.70' 


Pre- 
serves. 


$254.56 
338.59 


Fancy 

Articles. 

$536.95" 

555.40 


Orders. 


tl71.45 
182.33 


Miscella- 
neous. 

""$298.20 
108.14 


Paid  Con- 
signors. 


$1,867.92 


To  tal. 


$2,075.87 
2,407.16 


THE    SPRINGFIELD    (ILL.)  WOMEN'S    EXCHANGES    sales    in   1890   WCrC 

$9,698,  of  which  $7,600  was  returned  to  consignors.  The  balance  went 
for  expenses,  the  largest  items  of  which  were  $643  for  employes  and 
$380  for  rent.  The  edible  department  was  the  most  successful,  having 
had  passed  over  Its  counters  over  $7,000  worth  of  goods,  including 
white  bread,  3,252  loaves;  brown  bread,  2,456  loaves;  cake,  2,860  loaves; 
rolls,  6,128  dozen;  cookies,  1,873;  tea  cakes,  2,073  dozen;  doughnuts, 
3,.')95  dozen;  pies,  1,907;  beans,  999  crocks;  potato  chips,  710^  pounds; 
mincemeat.  590  pounds;  plum  puddings,  296;  cottage  cheese,  397  quarts. 
In  the  lunch  department,  4,537  meals  were  served  at  an  expense  of 
41,020,  leaving  $92  net  profit. 


women's  exchanges.  251 

The  Proper  Rules  may  be  modeled  on  those  of  the 
Harlem  (N.  Y.)  Women's  Exchange.  It  will  be  seen 
that  women  in  small  places  and  out  in  the  country  can 
get  the  advantages  of  such  cooperation  as  well  as  those 
in  cities.  The  women  members  in  cooperative  societies 
should  have  a  branch  of  this  nature  established  in  con- 
nection with  it  for  their  benefit. 

RULES  FOR  A  WOMAN'S  EXCHANGE. 

1.  We  receive  work  through  a  subscriber  to  the  funds  of  the  society 
to  an  amount  not  less  than  five  dollars  for  the  current  year. 

2.  Each  subscriber  of  five  dollars  may  enter  the  work  of  three  (3) 
persons  for  one  year.  Consignoi-s  not  using  subscribers'  ticket  may 
enter  work  for  two  dollars  per  year. 

3.  Our  commission  is  ten  per  cent  on  the  price  received. 

4.  All  work  is  received  subject  to  the  approval  of  the  managers. 

6.  Wax  and  feather  flowers,  hair,  leather,  splatter  and  splinter,  and 
cardboard  work  are  too  perishable  and  unsalable  to  be  accepted. 

6.  Articles  will  not  be  registered  until  express  and  mail  charges 
have  been  paid  on  them.  Articles  are  registered  between  the  hours  of 
11  and  4.  Packages  left  at  other  hours  must  be  marked  by  consignor, 
with  name,  address  and  price. 

7.  Clonsignors  must  call  or  send  for  their  articles  at  the  expiration  of 
one  year  from  the  date  of  their  entry.  If  not  sent  for  within  a  month 
after  that  time,  the  Society  will  not  hold  itself  responsible  for  them. 
No  articles  can  be  withdrawn  between  September  15th  and  27th.  Arti- 
cles cannot  be  re-entered.  Articles  sent  for  by  a  consignor  must  be 
described. 

8.  The  Society  does  not  hold  itself  responsible  for  losses,  having 
taken  all  reasonable  precautions  against  flre  and  theft. 

9.  All  letters  containing  information  about  articles  sent  to  the  Ex- 
change should  be  addressed  to  the  Society,  with  stamp  inclosed  for 
reply. 

10.  Articles  which  ladies  are  obliged  to  part  with  are  received  only 
upon  the  recommendation  of  an  officer  of  the  Society,  and  under  the 
rules  which  are  applied  to  other  consignors. 

11.  In  the  cake  and  preserve  department  there  is  a  standard,  and 
none  can  enter  cake  or  preserves  without  firet  sending  samples  of  their 
work.    Pickles,  preserves  and  jellies  are  sampled  every  year. 

12.  No  preserves  are  received  before  October  1st  or  after  April  1st. 

13.  No  worsted  goods  are  received  after  June  1st  until  October  1st. 

14.  Consignors  desiring  articles  returned  by  mall  must  take  all  risks, 
and  must  give  three  days'  notice  for  withdrawal  of  any  article. 

15.  Work  is  not  received  from  gentlewomen  whose  circumstances  do 
not  make  it  necessary  for  them  to  dispose  of  their  handiwork,  except 
where  the  proceeds  are  tx>  be  devoted  to  a  charitable  purpose. 

16.  Cash  payments  are  made  on  Saturdays  to  consignors  In  the  Cake 
and  Preserve  Department,  and  on  Wednesdays  to  all  other  consignors. 

17.  Consignors  must  put  their  own  prices  upon  the  articles  they  send. 


CHAPTER  XL 

THE  FUTURE  OF    COOPEEATION". 

The  Immediate  "Work  for  wage-earners  and  farm- 
ers, producers  and  consumers,  is  to  grasp  the  possibili- 
ties of  cooperation.  They  should  educate  themselves  in 
its  principles,  and  then  begin  in  a  small  way  to  carry 
them  out.  A  start  of  the  right  kind,  under  the  hum- 
blest auspices,  is  far  better  than  more  pretentious  and 
usually  injudicious  effort. 

Put  in  practice  in  this  way,  past  success  and  experience 
will  make  the  future  of  cooperation  comparatively  sure 
for  those  who  practice  it  in  a  genuine  manner  and  with 
proper  management.  But  the  future  holds  no  induce- 
ments for  porely  conducted  or  mismanaged  cooperation. 

A  Cooperative  Congress. — The  great  step  that 
should  now  be  taken  is  for  cooperators  to  get  together. 
Weak  efforts  in  this  direction  have  already  been  made,  but 
a  comprehensive  union  is  needed  that  shall  bind  together 
the  distributive  societies  and  enable  them  to  assist  each 
other.  With  communication  established  between  coope- 
rators, not  only  distributive  societies  but  the  other  forms 
of  cooperation  described  in  this  Manual,  it  will  be 
feasible  to  hold  during  the  World's  Fair  at  Chicago  in 
1893  the  first  cooperative  congress  in  America.  Such 
a  convention,  with  its  different  sections  for  special  phases 
of  associated  effort,  and  its  mass  meetings  for  the  con- 
sideration of  topics  of  general  interest,  would  immensely 
stimulate  the  progress  of  true  cooperation. 

Nationalism  and  Socialism — It  is  doubtless  true 
that  the  general  success  of  cooperation  must  gradually 

252 


women's  exchanges.  863 

precede  much  of  the  nationalistic  and  socialistic  propo- 
sitions of  the  day.  Whether  cooperators,  having  proved 
the  utility  and  independence  of  self  help,  will  then 
desire  to  put  it  on  a  state  or  national  basis,  as  advocated 
by  the  nationalists,  time  alone  will  reveal. 

Certain  it  is  that  cooperation  is  destined  to  bring 
producer  and  consumer  comparatively  close  together. 
It  will  enable  farmers  to  carry  out  many  long-cherished 
schemes  for  marketing  their  produce  and  buying  their 
supplies.  It  will  enable  the  wage-earner  and  all  con- 
sumers to  save  enormous  sums  with  comparatively  little 
effort,  which  may  be  profitably  used  by  wage-earners 
becoming  their  own  employers  in  productive  industry. 
Public  sentiment  in  favor  of  cooperative  thrift  will  take 
the  place  of  the  present  general  tendency  to  extravagance 
in  small  matters.  By  diverting  the  profits  of  industry 
from  the  strong  box  of  monopoly  into  the  pockets  of  the 
people,  cooperatio  will  go  far  to  solve  the  otherwise  irre-n 
pressible  conflict  between  labor  and  capital. 

With  Past  Experience  in  this  country  and  England 
combined  with  the  superior  energy  and  enterprise  of  the 
American  people,  cooperation  is  destined  to  make  far 
greater  progress  on  the  American  continent  than  it  has  in 
other  countries.  This  statement  is  predicated  on  the 
idea  that  our  people  will  be  satisfied  to  undertake 
cooperation  in  a  small  way  instead  of  beginning  at  the 
top,  as  has  been  the  characteristic  of  the  efEorts  in  this 
direction  heretofore. 

Where  Existing  Laws  are  unfavorable  for  true 
cooperation,  proper  legislation  can  be  obtained.  Certain- 
ly the  capital  of  most  cooperative  societies  should  be 
exempt  from  taxation,  as  are  the  savings  banks  in 
many  of  our  States,  for  the  society  is  a  savings  bank  of 
the  most  effective  kind.  Neither  should  ignorance  or 
modesty  on  the  part  of  our  people  prevent  their  getting 
what  legislation  is  necessary.     Some  States  already  have 


364  HOW  TO   COOPERATE. 

excellent  laws  (see  Appendix)  while  the  jnst  and  equi- 
table principles  of  true  cooperation  commend  themselves 
to  the  most  intelligent  men,  whose  assistance  in  the 
movement  can  generally  be  secured. 

The  Future  of  Cooperation  is  thus  fraught  only 
with  good  to  the  individual  and  to  the  State.  Its  star  is 
in  the  ascendancy,  and  nothing  can  stay  its  course. 


APPENDIX. 


1.  "Working  By-Laws  and  Model  Riiles. 

2.  Descriptive  Directory  of  all  Classes  of  CoSperative  Enterprises. 

3.  Laws  Relative  to  Cooperation. 

4.  Blbllograpliy  of  Cooperation. 

5.  Advertisements. 


255 


CONTENTS   OF    APPENDIX    IN   DETAIL, 

1.  MODEL  RULES  AND  WORKING  BY-LAWS  OF  THE  Pages 

Rochdale  Equitable  Pioneers 258-274 

Allegan  County  Cooperative  Association 274-277 

Johnson  County  Cooperative  Association 277-282 

Lyons  Cooperative  Association 282-287 

Texas  Cooperative  Association 287-200 

Fruit  Growers'  Union,  Hammonton,  N.  J 290-293 

California  Fruit  Union 293-298 

Kansas  Alliance  Exchange  Company 298-301 

Grangers'  Bank  of  California 301-304 

Farmers'  Mutual  Fire  Insurance  Company 304-310 

2.  Descriptive  Directory  of  Cooperative  Enterprises. 

Detailed  Accounts  of  Many  Successful  Stores  and  other  con- 
cerns (see  Index) 311-325 

Mutual  Fire  Insurance  Companies,  List  of 325-328 

Creameries,  Cooperative  Directory  of 328-329 

Cheese  Factories,  Associated,  List  of 329-330 

Cooperative  Banks,  or  Building  and  Loan  Associations 330-332 

Women's  Exchanges,  Directory  of 332-a33 

3.  Laws  Relative  to  Cooperation  in  the  Respective  States 

and  Territories  (see  Index) 334-342 

4.  Bibliography  of  Cooperation 343-346 

6.   Advertisements. 


256 


[.    MODEL  RULES  AND  WORKING  BY-LAWS. 


THE   EOCHDALE   EQUITABLE   PIONEERS'   SOCIETY. 

This  society  being  the  originator  of  the  Eochdale  sys- 
tem of  cooperation,  it  has  always  aimed  to  be  a  model. 
We  therefore  publish  in  full  its  by-laws  or  rules,  from 
its  ofBcial  record  printed,  in  1889.  They  contain  many 
points  that  will  be  studied  with  interest  and  profit  by 
all  cooperators.  Some  of  their  provisions  are  made  to 
comply  with  the  requirements  of  the  English  law,  and 
therefore  may  not  be  adapted  to  American  wants.  The 
Kochdale  rules  are  also  longer  and  more  numerous  than 
our  American  societies  employ.  (The  shilling  is  com- 
puted at  twenty-five  cents  and  the  pound  at  five  dollars.) 

Instructions  to  Members. 

The  candidate  for  menibersliip  wiU  require  to  come  and  sign  the 
declaration  and  pay  a  deposit  on  the  shares  of  twenty-five  cents  or 
more. 

Pass-books  mnst  be  brought  to  the  office,  with  metallic  purchase 
tokens,  in  the  first  weeks  of  March,  June,  September  and  December  of 
each  year. 

None  but  five  dollar  and  twenty-five  dollar  tokens  taken  at  the  office 
The  times  for  changing  the  smaller  values  can  be  ascertained  by 
inquiry  at  the  shops. 

Members  desiring  to  make  withdrawals  will  be  required  to  come 
themselves,  or  send  a  note  by  the  person  authorized  to  receive  the 
money,  such  note  to  bear  the  bona-fide  signature  of  the  member.  No 
member  can  withdraw  liis  or  her  share  account  below  one  dollar  with- 
out withdrawing  altogether  and  forfeiting  the  sum  of  fifty  cents  from 
the  amount  in  the  book,  and  in  this  case  it  will  require  the  member  to 
attend  at  the  office. 

Interest  is  allowed  on  all  contributions  of  even  pounds  from  the  9th 
of  each  month,  but  no  Interest  is  allowed  on  sums  withdrawn  for  the 
quarter  in  which  they  are  withdrawn. 

The  office  is  open  every  day  for  the  receipt  of  contributions  and  the 
payment  of  withdrawals,  from  9  a.  m.  to  half  an  hour  before  the  tinjc 
for  closing  the  shops. 

N.  B.— No  contributions  are  received  from  the  Tliursday  before  the 
stocktaking  until  after  the  stocktaking  day.  The  day  for  taking  stock, 
etc.,  may  be  found  r»T>  xt^ferring  to  the  Society's  Almanac. 

17 


Rules  of  the  Rochdale  Equitable  Pioneers. 


Nams,  Object,  and  place  of  Office. 

1.  This  society  shall  be  called  the  "Rochdale  Equitable  Pio- 
NEEKs'  Society  Limited." 

2.  The  object  of  this  society  is  to  carry  on  the  trades  of  general  deal- 
ers, manufacturers,  and  the  buying  and  selling  of  land. 

3.  The  registered  office  of  this  society  shall  be  at  the  society's  store, 
in  Toad-lane,  Rochdale,  in  the  county  of  Lancaster  [England],  where 
all  the  books  of  accounts,  securities,  and  documents  of  the  society 
shall  be  kept,  other  than  such,  if  any,  as  are  required  for  carrying  on 
business  on  account  of  the  same  elsewhere ;  but  the  place  of  business 
may  be  altered  by  the  committee  of  management. 

4.  In  the  event  of  any  change  in  the  situation  of  the  registered  office, 
notice  of  such  change  shall  be  sent  within  fourteen  days  thereafter  to 
the  Registrar  in  manner  and  form  provided  by  the  Treasury  Regulation 
in  that  behalf. 

Admission  of  Members. 

6  (o)  The  society  shall  consist  of  the  present  members,  and  of  all  other 
persons  who  sliall  afterwards  be  admitted  in  the  following  manner:— 

(6)  A  person  wishing  to  become  a  member  must  apply  at  the  office 
to  the  secretary  or  other  officer  appointed.  He  must  state  his  name, 
residence,  and  occupation,  and  be  proposed  and  seconded  by  two  mem- 
bers of  the  society.  He  must  also  (at  the  time  of  application)  sign  a 
declaration  stating  his  willingness  to  abide  by  the  rules,  and  take  out 
not  less  than  five  shares,  and  pay  a  deposit  of  not  less  than  one  shilling 
on  account  of  the  said  shares,  together  with  an  entrance  fee  of  one 
shilling,  and  threepence  for  a  copy  of  these  rules.  Complete  lists  of 
the  names,  residences,  and  occupations  of  all  persons  who  have  ap- 
plied to  become  members  in  manner  hereinbefore  stated,  shall  be  sub- 
mitted to  the  next  weekly  meeting  of  the  committee  of  management 
for  their  approval ;  and  if  any  person  whose  name  is  on  the  said  list 
shall  be  objected  to  by  the  majority  of  the  committee  of  management 
then  present,  the  name  of  the  said  person  shall  be  erased  from  the  list. 
These  lists,  attested  by  the  signatures  of  the  president  and  secretary 
for  the  time  being,  shall  be  hung  up  in  the  society's  Central  Newsroom, 
for  the  inspection  of  the  members  three  clear  days  at  least  prior  to  tlie 
next  monthly  or  quarterly  meeting  of  members  following  their  aji- 
proval  by  the  committee  of  management;  and  if  at  the  said  monthly 
or  quarterly  meeting  objection  be  taken  by  a  majority  of  the  members 
present  at  such  meeting  to  any  of  the  persons  named  on  any  of  tlie 
said  lists,  such  person  or  persons  shall  not  be  admitted  as  members  of 
the  society;  but  all  other  persons  named  thereon  shall  be  considered 

258 


OF  THE   EOCHDALE   EQUITABLE   PIONEERS.  259 

to  be  finally  admitted.  All  persons  objected  to  by  either  the  commit- 
tee of  management  or  the  members  shall  have  the  whole  of  the  money 
which  they  shall  have  paid  into  the  society  returned. 

(c)  No  person  shall  continue  to  be  a  member  of  the  society  who 
does  not  purchase  from  the  society  to  the  extent  of  at  least  twenty 
dollars  per  annum. 

(d)  Any  society  or  company  registered  under  Act  of  Parliament  with 
limited  liability  may  become  a  member  of  the  society  on  application 
to  the  committee  of  management,  and  subject  to  their  approval,  and 
subsequent  sanction  of  the  members  in  manner  herein  provided  for 
individual  members. 

6.  A  list  of  names  and  residences  of  candidates  for  membership  shall 
be  kept  at  the  registered  office  of  the  society,  and  no  person  shall  be 
deemed  a  member  unless,  or  until,  his  name  appears  on  this  list.  And 
the  committee  of  management  shall  cause  the  names  of  all  persons 
who  under  these  rules  cease  to  be  members  to  be  erased  therefrom. 

Mode  of  Holding  Meetings,  Right  of  Voting,  and  of  Making, 
Altering  and  Rescinding  of  Rules. 

7.  That  general  meetings  of  the  members  be  holden  on  the  first  Mon- 
day in  each  month,  at  half-past  seven  o'clock  in  the  evening,  and  that 
the  meetings  on  the  first  Mondays  in  January,  April,  July  and  October 
be  tlie  quarterly  meetings  of  the  society,  at  which  meetings  the  officers 
shall  make  their  reports,  in  which  shall  be  specified  the  amount  of 
funds  and  value  of  stock  possessed  by  the  society. 

8.  That  tlie  ordinary  general  meetings  of  the  members  be,— 1st,  for 
the  approval  or  rejection  of  proposed  new  members;  2d,  for  the  ap- 
proval or  otherwise  of  the  minutes  of  the  committee;  3d,  for  discuss- 
ing the  affairs  of  the  society;  4th,  for  explaining  the  principles  and 
rules  of  the  society;  6th,  for  making  suggestions  for  the  guidance  of 
the  committee  of  management. 

9.  Tlie  general  meetings  of  the  educational  department  shall  be  held 
on  the  second  Mondays  in  January,  April,  July  and  October,  at  lialf- 
past  seven  o'clock  in  the  evening,' for  the  purposes  following:— For 
receiving  the  report  of  the  committee;  for  empowering  tlie  committee 
to  make  special  arrangements  for  extending  the  sphere  of  this  depart- 
ment and  for  any  other  business  connected  therewith.  The  educa- 
tional committee  shall  not  be  allowed  to  take  any  new  premises  with- 
out the  sanction  of  the  committee  ot  management,  or  that  of  a  quarterly 
meeting  of  the  society. 

10.  A  special  general  meeting  may  be  convened  at  any  time  in  virtue 
of  a  resolution  of  the  committee,  by  a  notice  being  posted  In  the  meet- 
ing room  and  the  principal  places  of  business  of  tlie  society,  specifying 
the  time  and  objects  of  the  meeting  six  clear  days  at  least  before  the 
meeting;  or  by  any  fifty  members,  on  giving  in  like  manner  six  clear 
days'  notice  thereof  in  writing,  specifying  the  object,  signed  by  them. 

^^No  other  business  can  be  transacted  at  any  such  meeting  than 
the  business  specified  In  the  notice  convening  it. 

11  (a)  All  general  meetings  shall  be  held  at  the  chief  place  of  busi- 
ness of  the  society,  or  at  such  other  place;  as  any  quarterly  meeting 
may  determine;  and  no  quarterly  or  special  general  meeting  of  the 
•ociety  shall  proceed  to  business  tinless  at  least  fifty  members  of  tlie 


360  MODEL  RULES  AND  WORKING  BY-LAWS 

society  be  present  within  one  hour  of  tlie  time  of  meeting,  otherwise 
such  meeting,  if  It  be  tlie  ordinary  quarterly  meeting  of  the  society,  or 
a  special  general  meeting,  convened  by  the  committee  of  management 
shall  stand  adjourned  to  that  day  week ;  but  if  it  be  convened  by  notice 
from  the  members  shall  be  absolutely  dissolved.  But  any  general 
meeting  may  adjourn  from  time  to  time  for  any  period  not  exceeding 
fourteen  clear  days;  and  no  meeting  shall  be  rendered  incapable  of 
transacting  business  by  the  want  of  a  quorum  after  the  chair  has  been 
taken. 

(6)  No  resolution  of  a  quarterly  meeting,  of  which  one  month's 
notice  shall  have  been  given,  before  submitting  the  same  for  consid- 
eration, shall  be  rescinded  or  amended  except  after  a  similar  notice 
shall  have  been  given  of  the  intention  of  proposing  such  rescission  or 
amendment. 

12.  At  all  meetings  of  the  society,  each  member  shall  have  one  vote 
only,  except  the  president,  who  shall  have  a  casting  vote  in  addition 
to  his  own  as  a  member. 

13.  No  new  rule  shall  be  made,  nor  any  of  the  rules  herein  contained 
or  hereafter  to  be  made  shall  be  repealed  or  altered,  except  by  the 
vote  of  a  majority  of  two-thirds  of  the  members  present  and  voting  at 
a  special  general  meeting  of  the  society,  to  be  called  in  pursuance  of  a 
requisition  by  fifty  or  more  members,  by  fixing  such  requisition,  and 
setting  forth  the  day  of  holding  such  meeting,  in  the  place  where  the 
business  of  the  society  is  transacted,  four  weeks  next  before  such  gen- 
eral meeting.    No  amendment  of  rules  is  valid  until  registered. 

Appointment  of  Officers  and  Committee  of  Management, 
Theib  Respective  Duties,  and  mode  op 
Conducting  Business. 
14  (a)  The  management  of  this  society  shall  be  vested  in  a  commit- 
tee, consisting  of  a  president,  treasurer,  secretary,  and  eight  commit- 
tee-men. The  first  committee  under  this  iiile  shall  be  the  committee 
in  office  at  the  time  of  the  registration  of  this  rule.  The  president, 
treasurer  and  secretary  who  shall  be  in  office  when  this  rule  is  regis- 
tered, shall  be  the  first  president,  treasurer  and  secretary  under  this 
rule.  Afterwards  the  president,  treasurer  and  secretary  shall  be 
elected  at  the  general  meeting  to  be  held  in  the  month  of  January,  and 
three  committee-men  shall  be  elected  at  each  of  the  general  meetings 
to  be  held  in  the  months  of  April  and  July;  the  remaining  two  com. 
mittee-men  shall  be  elected  at  the  general  meeting  to  be  held  in  the 
month  of  October  in  each  year.  Tlie  committee  in  office  when  this  rule 
Is  registered  shall  decide  amongst  themselves  in  what  rotation  they 
retire;  the  retiring  officers  being  eligible  for  re-election;  but  if  through 
death,  resignation  or  otherwise,  a  vacancy  should  occur  amongst  the 
officers  of  this  society,  a  special  meeting  of  the  members  may  be  called, 
at  which  meeting  another  or  others  may  be  elected  to  fill  such  vacancy 
or  vacancies.  Tliat  no  person  be  eligible  for  a  member  of  the  commit- 
tee who  has  not  been  a  member  of  the  society  twelve  months,  or  eligi- 
ble for  president  who  has  not  been  on  the  committee ;  but  any  member 
of  the  committee  may  stand  his  poll  for  the  president  without  first 
resigning  his  office  as  committee-man.  Any  committee-man  or  other 
officer  may  be  removed  by  a  special  general  meeting  called  for  the 
purpose. 


OF  THE  ROCHDALE  EQUITABLE   PIONEERS.  261 

(b)  Candidates  for  the  committee  of  management  and  for  all  other 
offices  of  the  society  shall  be  nominated  at  the  monthly  meeting  im- 
mediately preceding  the  quarterly  meeting  at  which  they  are  proposed 
for  election.  Should  the  number  nominated  not  be  sufftcient  to  fill 
the  vacancies,  the  quarterly  meeting  shall  elect  the  required  number 
not  so  nominated. 

15.  The  general  management  of  the  society  shall,  subject  to  the  pro- 
visions hereinafter  contained,  be  in  the  committee  of  management, 
wlio  shall  have  the  control  of  all  business  carried  on  by  or  on  account 
of  tlie  society,  the  determination  of  the  persons  to  be  employed  therein, 
and  the  rates  "of  payment  to  be  made  to  such  persons,  the  appointment 
of  salesmen  or  other  servants  necessary  for  conducting  the  same,  and 
may  assign  to  any  such  servant  such  duties  and  salaries  as  they  may 
think  fit.  All  members  of  the  society  shall,  in  respect  of  any  work  or 
service  which  they  may  perform  for  or  on  behalf  of  the  society,  be  paid 
after  such  rate  of  payment  as  the  committee  may  determine. 

16  (a)  All  moneys  received  on  account  of  contributions,  donations, 
admissions,  fines,  or  otherwise,  shall  be  paid  to  an  account  to  be 
opened  with  some  bank,  selected  by  the  committee  of  management,  in 
the  name  of  the  society,  unless  the  finances  of  the  society  are  too  small 
to  allow  of  such  an  account  being  kept;  in  which  case  they  shall  re- 
main under  the  care  of  tlie  treasurer,  and  all  such  moneys  shall  be 
applied  towards  carrying  out  the  objects  of  the  society,  according  to 
the  rules  thereof.  And  so  much  of  tlie  funds  of  tlie  society  as  are  not 
wanted  for  immediate  use,  or  to  meet  the  usual  accruing  liabilities, 
under  the  provisions  aforesaid,  shall,  with  the  consent  of  tlie  quarterly 
meeting,  or  a  special  general  meeting  of  the  members,  be  invested  by 
the  committee  of  management.  The  business  of  the  society  sliall  be 
conducted  for  ready  money. 

(6)  Every  year  before  the  first  of  June,  the  committee  of  manage- 
ment shall  cause  the  secretary  to  send  to  the  Registrar  the  annual 
return,  in  the  form  prescribed  by  the  Chief  Registrar  of  Friendly  Soci- 
eties, required  by  the  Industrial  and  Provident  Societies  Act,  1876,  of 
the  receipts  and  expenditure,  funds  and  effects  of  the  society,  and  of 
the  number  of  members  of  the  same  up  to  the  31st  December  then  last 
Inclusively,  as  audited  and  laid  before  a  general  meeting,  showing  sep- 
arately the  expenditure  in  respect  of  the  several  objects  of  the  society, 
together  with  a  copy  of  the  auditors'  report,  if  any. 

(c)  Such  return  shall  state  whether  the  audit  has  been  conducted  by 
a  public  auditor  appointed  under  tlie  Industrial  and  Provident  Socle- 
ties  Act  1876,  and  by  whom ;  and  if  such  audit  has  been  conducted  by 
any  persons  other  than  a  public  auditor,  shall  state  the  name,  address, 
and  calling  or  profession  of  each  of  such  persons,  and  the  manner 
in  which,  and  the  authority  under  which,  they  were  respectively 
appointed. 

(</)  It  shall  be  the  duty  of  the  committee  of  management  to  provide 
the  secretary  with  a  sufHcient  number  of  copies  of  the  annual  return 
for  supplying  jjratuitously  every  member  or  person  Interested  in  the 
funds  of  the  society,  on  his  application,  with  a  copy  of  the  last  annual 
return  of  the  society  for  the  time  being;  and  it  shall  be  the  duty  of  the 
secretary  to  supply  such  gratuitous  copies  on  application  accordingly. 

(e)  It  shall  be  the  duty  of  the  committee  of  management  to  kocji  a 
copy  of  the  last  balance  sheet  of  the  society  for  the  time  being,  to- 


262  MODEL  RULES  AND  WORKING    BY-LAWS 


gether  with  the  report  of  tlie  auditors,  If  any,  always  hung  up  in  a  con- 
spicuous place  at  the  registeretl  office  of  the  society. 

17.  The  committee  of  management  sliall  meet  every  Thursday  even- 
ing, at  halt-past  seven  o'clock,  and  any  six  of  the  committee  shall 
form  a  quorum.  It  shall  in  all  things  act  for  and  in  the  society's  name, 
and  all  acts  and  orders  nnder  tlie  powers  delegated  to  it  shall  have  the 
like  force  and  effect  as  if  they  were  the  acts  and  orders  of  a  majority 
of  the  members  of  the  society  at  a  general  meeting  tliereof.  Every 
question  at  such  meeting  shall  be  decided  by  a  majority  of  votes.  Any 
two  of  the  committee  may  call  a  special  meeting  thereof,  by  giving  one 
clear  day's  notice  in  writing  to  the  secretary;  but  at  such  special  meet- 
ing no  other  business  than  that  specified  in  the  notice  shall  be  taken 
into  consideration.  The  committee  shall  convene  all  meetings  of  the 
society  on  such  requisitions  as  are  herein  mentioned,  and  shall  also 
cause  the  accounts  of  all  business  carried  on  on  behalf  of  the  society 
to  be  regularly  entered  in  proper  books,  and  shall  cause  a  statement  of 
the  accounts  of  the  society  to  be  made  out  up  to  the  first  or  second 
Tuesday  in  the  months  of  March,  June,  September  and  December  in 
each  year,  so  as  to  give  not  less  tlian  twenty-seven  days  between  the 
time  of  taking  stock  and  the  following  quarterly  meeting;  and  also  so 
as  to  avoid  having  a  quarter  consisting  of  twelve  weeks  only.  This 
statement,  together  with  all  the  necessary  vouchers,  shall  be  laid  be- 
fore the  persons  appointed  to  audit  the  same,  not  less  than  ten  days 
before  the  day  appointed  for  the  quarterly  meeting  of  the  society.  All 
other  committees,  whether  educational  or  otherwise,  which  are  or  may 
be  formed  in  connection  with  this  society,  shall  be  subject  to  the 
above  committee. 

18.  The  president  shall  act  as  chairman  at  all  meetings  of  the  soci- 
ety, and  should  he  not  be  present  at  any  of  the  society's  meetings,  the 
officers  and  members  present  shall  elect  one  from  amongst  themselves 
to  act  as  chairman  on  that  occasion.  The  president,  or  chairman  act- 
ing in  his  absence,  shall  sign  all  contracts,  also  the  minutes  of  the 
proceedings  at  each  of  the  society's  meetings,  and  shall  have  the  cast- 
ing vote,  besides  his  own  vote  as  a  member. 

19.  Tlie  secretary  shall  give  his  attendance  at  all  meetings  of  the 
society  and  of  the  committee  of  management;  summon  all  special 
meetings  of  the  committee,  and  record  correctly  the  names  of  the  sai<l 
committee  there  present,  and  the  minutes  of  their  proceedings,  which 
he  shall  transcribe  into  a  book,  to  be  authenticated  by  the  signature 
of  the  chairman  as  the  proceedings  of  the  meetings;  he  shall  counter- 
sign all  contracts,  and  shall  on  all  occasions  in  the  execution  of  his 
office,  act  under  the  superintendence,  control  and  direction  of  the  said 
committee.  An  assistant  secretary  may  at  any  time  be  appointed  by 
the  committee  of  management. 

20.  The  treasurer  shall  be  responsible  for  such  sums  of  money  as 
may  from  time  to  time  be  paid  into  his  hands  by  the  secretary,  or  by 
any  person  on  account  of  the  society,  and  for  the  investment  or  appli- 
cation of  the  same  under  the  authority  of  the  committee  of  manage- 
ment, in  such  manner  as  they  shall  direct;  he  shall  see  that  the  cash 
account  is  balanced  weekly,  and  shall  supply  the  committee  with  a 
duplicate  thereof  when  required. 

21.  Every  person  appointed  to  any  office  touching  the  receipt,  man- 
agement or  expenditure  of  money  for  the  purposes  of  the  socletyt 


OF  THE   ROCHDALE  EQUITABLE   PIOKEERS.  263 

shall,  before  entering  upon  the  duties  of  his  office,  give  such  security 
as  is  thought  sufficient  by  the  committee  of  management  for  the  time 
being. 

22.  At  any  quarterly  meeting  of  the  society,  the  majority  of  the 
members  present  may  assign  to  tlie  committee,  treasurer,  secretary, 
auditors,  or  any  other  officer  of  the  society,  such  remuneration  as  seems 
to  them  desirable. 

23.  No  servant  of  this  society  shall  serve  any  office  in  the  committee 
of  management,  nor  be  allowed  to  vote  for  any  candidate  for  the  com- 
mittee of  management,  or  be  an  auditor  on  any  account  whatever. 

24.  Any  member  of  the  committee  of  management  shall  be  disquall. 
fled  from  remaining  on  the  committee  if  he  holds  any  other  office  or 
place  of  profit  under  the  society,  except  such  as  may  be  assigned 
according  to  Rule  22;  if  he  becomes  bankrupt,  or  if  he  is  concerned  in 
or  participates  in  the  profits  of  any  contract  with  the  society.  But  the 
above  rule  shall  be  subject  to  the  following  exceptions :  That  no  mem- 
ber of  the  committee  shall  vacate  his  office  by  reason  of  his  being  a 
member  of  any  company  or  society  which  has  entered  into  contracts 
with,  or  done  any  work  for  this  society.  Nevertheless,  he  shall  not 
vote  in  respect  of  such  contract  or  work ;  and  if  he  does  so  vote,  his 
vote  shall  not  be  counted. 

25.  A  separate  and  distinct  account  shall  be  kept  of  the  allowance 
for  educational  purposes.  Tliis  fund  sliall  be  under  the  management 
of  a  special  committee,  consisting  of  the  president  of  the  society  for 
the  time  being,  and  ten  members,  five  of  whom  shall  be  appointed  at 
the  quarterly  meeting  in  April,  and  five  at  the  quarterly  meeting  in 
October,  and  retire  alternately.  The  educational  committee  sliall  be 
held  responsible  to  the  quarterly  meetings  of  the  society  for  the  proper 
disposal  of  the  fund  placed  under  their  care,  and  shall  not  be  allowed 
to  vote  away  any  portion  thereof  to  be  spent  or  disposed  of  by  any 
other  party.    They  shall  appoint  a  chairman  from  amongst  themselves. 

26.  No  president,  secretary,  treasurer,  or  other  member  of  the  com- 
mittee, while  in  office,  shall  be  allowed  to  nominate  or  second  any 
member  to  serve  on  the  committee  of  management. 

Limitation  of  Amount  of  Members'  Share  Investment. 

27.  No  member,  other  than  a  registered  society,  shall,  subject  to 
such  restrl(!tions  as  shall  from  time  to  lime  be  determined  by  a  quar- 
terly meeting,  be  entitled  to  an  interest  in  the  shares  or  funds  of  the 
society  exceeding  the  sum  of  two  hundred  pounds. 

Power  to  Accept  Loans  and  Deposits. 

28.  Tlie  committee  of  management  may  from  time  to  time,  for  the 
I)urposes  of  the  society,  obtain  by  way  of  loan  from  any  person,  sociely 
or  (u)nii)aiiy,  whether  or  not  a  member  of  the  society,  on  security  of 
bonds  signed  by  three,  at  least,  of  the  committee,  and  countersigned 
by  the  secretary  for  the  time  being,  or  such  other  security  as  shall  be 
agreed  ui)on  between  the  committee  of  management  and  the  lender. 
They  may  also  obtain  advances  from  the  society's  bankers  from  time 
to  time,  and  give  continuing  security  by  mortgage  (legal  or  equitable) 
imder  the  seal  of  the  society  for  the  money  which  slwall  be  owing  on 
the  account  current  of  the  society  with  the  bankers.    The  total  amount 


264  MODEL  RULES  AND   WOEKiNG    BY-LAWg 


of  the  stun  or  sums  so  borrowed,  and  of  deposits  under  Rule  29,  shall 
not  exceed  such  sum  or  sums  as  shall  have  been  approved  by  a  major- 
ity of  the  members  present  at  a  quarterly  or  special  meeting,  and  shall 
not  at  any  time  exceed  two-thirds  of  the  amount  of  the  declared  share 
capital  of  the  society. 

They  shall  be  empowered  to  give  such  rate  of  Interest  not  exceeding 
six  per  cent  per  annum,  and  subject  to  such  terms  of  repayment  as 
shall  be  agreed  upon. 

29.  The  committee  of  management  may  receive  deposits  of  not  more 
than  one  dollar  and  twenty-flve  cents  in  any  one  payment,  nor  more 
than  one  hundred  dollars  from  any  one  depositor,  payable  on  not  less 
than  two  clear  days'  notice.  They  may  agree  to  pay  upon  such  deposit 
such  rate  of  interest  not  exceeding  five  per  cent  per  annum,  as  may 
from  time  to  time  seem  to  them  desirable.  No  payment  of  withdrawa- 
ble capital  shall  be  made  while  a  claim  on  account  of  a  deposit  is 
unsatisfied. 

Share  Capital— How  Paid  up.  Notice  for  Withdrawal. 

30.  The  capital  of  the  society  shall  be  raised  in  shares  of  five  dollars 
each,  which  shall  not  be  transferable,  except  in  the  case  mentioned  in 
Rule  39.  Each  member  must  hold  at  least  five  shares,  and  shall  not 
pay  less  than  seventy-five  cents  until  he  has  made  up  his  five  shares; 
and  on  default  shall  be  fined  six  cents  per  quarter,  unless  the  default 
is  shown  to  have  arisen  from  sickness,  distress,  or  want  of  employ- 
ment, or  any  other  reason  satisfactory  to  the  committee  of  manage- 
ment, in  which  case  a  written  statement  of  the  cause  of  default  shall 
be  sent  to  the  secretary  at  the  time  at  which  such  payments  ouglit  to 
be  made,  otherwise  the  fines  shall  be  in  force.  Profits  arising  from 
members'  trade  when  not  withdrawn  may  be  considered  as  contribu- 
tions to  shares.  Any  member  may  pay  the  whole  or  any  part  of  his 
shares  in  advance. 

31.  All  sums  due  from  any  member  under  the  provisions  of  these 
rules  for  contributions  to  shares  or  otherwise,  shall  be  recoverable 
from  him,  his  executors  or  administrators,  by  legal  process,  as  a  debt 
due  to  the  society. 

32.  Should  the  committee  of  management  have  more  funds  on  hand 
than  they  can  profitable  invest,  they  shall  have  power  in  the  first  place 
to  repay  all  loans  contracted  under  the  28th  rule,  and  should  they  still 
liave  too  much  money,  shall  reduce  the  number  of  shares  held  by  tlie 
members,  the  highest  being  the  first  paid  off.  Members  may  allow 
their  surplus  shares  to  remain  in  the  funds  of  the  society  after  the  time 
of  notice  has  expired,  but  shall  not  receive  interest  thereon. 

33.  Members  may  withdraw  any  sum  above  twenty-flve  dollars, 
according  to  the  following  scale  of  notice,  subject,  however,  to  tlie  dis- 
cretion of  the  committee  of  management:— 

$10  on  application.  ^250  to  $375    6  weeks. 

37.5  to  500  7  weeks. 
500  to  625  8  weeks. 
625  to  750  9  weeks. 
750  to  875  10  weeks. 
875  to  1000  11  weeks. 

Cases  of  Distress. 

34.  A  member,  being  In  distress,  may  withdraw  any  sum  he  may 
Have  m  tne  lunds  of  tne  socletv  .above  one  dollar  and  twenty-flve 


10  to 

$25 

1  week. 

25  to 

50 

2  weeks. 

50  to 

100 

3  weeks. 

100  to 

150 

4  weeks. 

160  to 

250 

5  weeks. 

OF  THE   ROCHDALE  EQUITABLE   PIONEERS.  265 

cents,  at  the  discretion  of  the  committee  of  management,  such  member 
may,  however,  be  called  upon  to  repay  such  withdrawal  in  manner 
provided  by  Rule  30,  until  his  shares  again  amount  to  not  less  than 
twenty-five  dollars. 

Members  Provided  with  Copies  of  Rules. 

35.  It  shall  be  the  duty  of  the  committee  of  management  to  provide 
the  secretary  with  a  sufficient  number  of  copies  of  tlie  rules,  to  enable 
him  to  deliver  to  any  person  on  demand  a  copy  of  such  rules  on  pay- 
ment of  a  sum  not  exceeding  twenty-five  cents,  and  of  the  secretary 
to  deliver  such  copies  accordingly. 

Appointment  of  Auditors  and  Theib  Duties. 

36.  The  committee  of  management  shall  once' at  least  In  every  year 
submit  the  accounts  of  the  society,  together  with  a  general  statement 
of  the  same  and  all  necessary  vouchers  up  to  the  31st  December  then 
last,  for  audit,  either  to  one  of  the  public  auditors  appointed  under  the 
Industrial  and  Provident  Societies  Act,  1876,  or  to  two  or  more  persons 
appointed  as  auditors  by  the  members  at  the  meeting  next  before  each 
yearly  meeting  of  the  society,  and  shall  lay  before  every  such  meeting 
a  balance  sheet  (which  eitlier  may  or  may  not  be  identical  with  the 
annual  return,  but  must  not  be  in  contradiction  to  the  same),  showing 
the  receipts  and  expenditures,  funds  and  effects  of  the  society,  together 
with  a  statement  of  the  affairs  of  tlie  society  since  the  last  ordinary 
meeting,  and  of  their  then  condition.  Such  auditors  shall  have  access 
to  all  the  books  and  accounts  of  the  society,  and  shall  examine  eveiy 
balance  sheet  and  annual  return  of  the  receipts  and  expenditure,  funds 
and  effects  of  the  society,  and  shall  verify  the  same  with  the  accounts 
and  vouchers  relating  thereto,  and  shall  either  sign  the  same  as  found 
by  them  to  be  correct,  duly  vouched,  and  in  accordance  with  law,  or 
shall  specially  report  to  the  meeting  of  the  society,  before  which  the 
same  is  laid,  in  what  respect  they  find  it  incorrect,  unvouched,  or  not 
in  accordance  with  law. 

Inspection  of  Books  and  Accounts. 

37.  The  books  and  accounts  of  the  society  shall  be  open  to  the  inspec- 
tion of  any  member  or  person  having  an  interest  in  the  funds  of  the 
society,  at  all  reasonable  times,  at  the  registered  office  of  the  society, 
or  at  any  place  where  the  same  are  kept,  subject  to  such  regulations 
as  to  the  time  and  manner  of  such  inspection  as  may  be  made  from 
time  to  time  by  the  general  meetings,  and  it  shall  be  the  duty  of  the 
secretary  to  produce  them  for  inspection  accordingly,  provided  that 
no  member,  other  than  an  officer  of  the  society,  shall  bo  entitled  to 
inspect  the  loan  or  deposit  account  of  any  member  without  his  writ- 
ten consent. 

Withdrawal  from    the    Society,  and  Payment  of  Deceased 
Members'  Shakes. 

38.  A  member  who  has  paid  up  all  his  contributions  may  withdraw 
from  the  society;  and  any  member  may  withdraw  without  paying  up 
all  his  contributions,  with  the  consent  of  a  majority  of  the  committee 


266  MODEL  BULES   AND   WORKING    BY-LAWS 


of  management.  Upon  the  withdrawal  or  exchision  of  any  member, 
he  shall  receive  payment  of  the  capital  advanced  by  him,  with  all 
arrears  of  interest  and  profits,  if  any,  according  to  the  provisions  of 
Rule  33,  or  within  six  months  after  such  withdrawal  or  exclusion. 
Any  member  having  received  any  interest  or  participated  in  the  profits, 
shall,  in  case  of  withdrawal  from  the  society,  forfeit  such  sum  (not 
exceeding  fifty  cents)  as  the  committee  of  management  may  think 
proper;  such  forfeits  to  be  applied  to  the  reduction  of  the  value  of 
fixed  stock. 

39.  The  secretary  shall  keep  a  book  in  which  he  shall  register  or 
record  all  nominations  made  by  members  of  the  society  of  any  person 
or  persons  not  being  officers  or  servants  of  the  society,  unless  any  such 
officer  or  servant  is  the  husband,  wife,  father,  mother,  child,  brother, 
sister,  nephew  or  niece  of  the  nominator,  to  whom  such  nominator's 
shares  (the  term  shares  including,  for  the  purposes  of  this  rule,  loans 
and  deposits)  shall  be  transferred  at  his  decease,  provided  that  the 
amount  credited  to  him  in  the  books  of  the  society  does  not  exceed 
five  hundred  dollars. 

Tlie  secretary  shall  in  like  manner  record  or  register  all  revocations 
or  variations  of  such  nominations  by  the  nominator. 

Tlie  nominator  shall  pay  six  cents  to  the  management  fund  for  the 
recording  or  registering  of  every  such  nomination,  revocation,  or 
variation. 

On  receiving  satisfactory  proof  of  the  dea(h  of  a  nominator,  the  com- 
mittee shall,  at  their  option,  either  transfer  the  sliares  in  manner 
directed  in  such  nomination,  or  pay  to  any  person  entitled  thereunder 
the  full  value  of  his  interest,  unless  the  shares  to  be  transferred  to  any 
nominee  would  raise  his  interest  in  the  society  to  an  amount  exceeding 
one  thoasand  dollars,  in  which  case  they  shall  pay  him  the  full  value 
of  such  shares,  not  exceeding  the  sum  aforesaid.  An  entry  of  such 
payment  shall  be  made  in  the  proper  book,  and  thereupon  the  shares 
so  paid  for  shall  be  extinguished.  If  any  member  entitled  to  an  inter- 
est in  the  society  not  exceeding  five  hundred  dollars  dies  intestate 
and  without  having  made  any  nomination  which  remains  unrevoked 
at  his  death,  such  interest  shall  be  transferable  or  payable  without 
letters  of  administration  to  or  among  the  persons  who  appear  to  a 
majority  of  the  committee,  upon  such  evidence  as  they  may  deem  sat- 
isfactory, to  be  entitled  by  law  to  receive  the  same,  subject  to  the  pro- 
visions of  the  Provident  Nominations  and  Small  Intestacies  Act,  1883. 

40.  If  any  member,  entitled  to  an  interest  in  the  society  not  exceed- 
ing five  hundred  dollars,  dies  leaving  a  will,  and  without  having  made 
any  nomination  which  remains  unrevoked  at  his  death;  or  If  any 
momber  entitled  to  an  interest  in  the  society  exceeding  five  hundred 
dollars  dies,  such  Interest  shall  be  transferable  or  payable  only  to  his 
executors  or  administrators,  subject  as  aforesaid. 

41.  If  any  member  becomes  bankrupt  his  interest  In  the  society  shall 
be  transferable  or  payable  to  the  trustee  of  his  property. 

42.  Upon  the  death  of  any  member,  unless  the  person  nominated  as 
aforesaid,  or  in  the  event  of  there  being  no  such  nominated  person,  the 
legal  personal  representative  of  such  deceased  member  shall,  within 
one  month  thereafter,  give  notice  thereof,  in  writing,  to  the  secretary, 
stating  the  Christian  and  surname,  place  of  abode,  and  profession  or 
business  of  such  nominated  person  or  legal  personal  representative, 


OF  THE   EOCHDALE   EQUITABLE   PIONEEES.  267 

as  the  case  may  be;  twenty-five  cents  shall  be  deducted  from  the  sum 
payable  to  him.  No  interest  will  be  allowed  on  deceased  members' 
shares  after  the  termination  of  the  time  such  notice  should  have  been 
given,  until  legally  transferred. 

Application  of  Profits. 

43.  The  net  proceeds  of  all  businesses  carried  on  by  the  society  after 
paying  or  providing  for  the  expenses  of  management  and  interest  on 
loans  and  deposits  shall  be  appropriated  as  follows  :— 

1st.  To  reduction  of  fixed  stock,  according  to  the  following  ratio  on 
the  first  cost.  Fixtures  and  machinery  at  ten  per  cent  per  annum; 
shop  buildings,  warehouses,  workshops,  offices  and  meeting  rooms  at 
two  and  one-half  per  cent  per  annum ;  and  cottage  buildings  at  one 
per  cent  per  annum. 

2d.  All  entrance  fees  and  forfeits  on  withdrawal,  shall  be  applied  to 
reduction  of  such  portion  of  fixed  stock  as  the  committee  of  manage- 
ment shall  from  time  to  time  determine. 

3d.  Interest  not  exceeding  at  the  rate  of  five  per  cent  per  annum  shall 
be  credited  quarterly  to  the  account  of  each  member  upon  the  share 
capital  standing  to  his  credit  in  the  books  of  the  society. 

4th.  The  excess,  if  any,  of  the  interests  and  dividends  received  from 
the  investments  of  the  society,  including  rents  upon  shops  and  other 
fixed  stocks  in  use  by  the  society,  and  the  balance  of  all  rents  re- 
ceived from  cottages  and  other  property  belonging  to  the  society 
over  and  above  the  interest  allowed  upon  the  loans,  deposits,  and 
members'  share  capital,  shall  be  carried  to  a  fund  to  be  called  "The 
Investment  Reserve  Fund,"  which  sliall  only  be  appropriated  by 
direction  of  a  quarterly  meeting. 

Bth.  Two  and  one-half  per  cent  of  the  remainder,  after  the  provision 
for  reduction  of  fixed  stock  and  interest  upon  capital  as  aforesaid, 
shall  be  carried  to  the  account  of  the  educational  fund,  besides  the 
cost  of  room,  light  and  fuel. 

6th.  Tlie  remainder  shall  be  divided  among  the  members  of  the  society 
in  proportion  to  the  amount  of  their  purchases  during  the  quarter. 

7th.  The  profits  upon  goods  supplied  to  non-members,  together  with 
all  fractional  parts  of  a  penny  in  the  division  of  profits,  shall  be  car- 
ried to  a  fund  to  be  called  the  reserve  fund.  This  fund  shall  accumu- 
late, and  shall  only  be  appropriated  by  direction  of  a  quarterly 
meeting,  either  to  some  provident  purpose  or  to  the  reduetion  of 
some  portion  of  the  fixed  stock;  but  no  appropriation  of  the  n^serve 
fund  shall  be  allowed  unless  one  month's  notice  of  the  intention  to 
propose  such  appropriation  shall  have  been  given. 

Complaints,  Suggestions,  and  injurious  Conduct. 

44.  If  any  member  have  any  complaint  to  make  relative  to  the  qual- 
ities or  prices  charged  for  goods  supplied  by  the  society,  or  respecting 
the  conduct  of  any  of  the  servants  or  offlcci-s  of  the  society,  such  com- 
plaint shall  be  sent  to  the  committee  in  writing,  signed  by  the  member 
complaining  or  some  otlier  member  on  his  or  their  behalf,  and  shall  be 
investigated  and  decided  upon  l)y  tlie  committee,  such  decision  to  be 
enteretl  In  their  minute  book  ;  and  If  satisfaction  be  not  given  by  tlielr 
decision,  the  same  may  be  brought  before  a  general  meeting  of  the 


268  MODEL  BULES   AND   WORKING   BT-LA.WS 


members;  and  if  not  then  settled  to  the  satisfaction  of  the  parties 
complaining,  shall  be  referred  to  a  quarterly  meeting.  Any  member 
may  likewise  send  to  the  committee,  in  writing,  any  suggestions  for 
carrying  into  better  effect  the  objects  of  the  society,  which  shall  be 
considered  by  the  committee. 

45.  The  name  of  the  society  shall  be  kept  painted  in  letters  easily 
legible,  and  affixed  on  the  outside  of  every  office  or  place  in  which  the 
business  of  the  society  is  carried  on,  in  a  conspicuous  position,  and 
shall  be  engraven  in  legible  characters  on  its  seal,  and  shall  be  men- 
tioned in  legible  characters  in  all  notices,  advertisements,  and  other 
official  publications  of  the  society,  and  in  all  bills  of  exchange,  prom- 
issory notes,  indorsements,  cheques,  and  orders  for  money  and  goods 
purjwrting  to  be  signed  by  or  on  behalf  of  the  society,  and  in  all  bills 
of  parcels,  invoices,  receipts  and  letters  of  credit  of  the  society. 

46.  The  committee  of  management  may  suspend  any  member  who 
persists  in  any  conduct  injurious  to  the  society,  until  they  submit  the 
same  to  a  general  meeting  (of  whicli  the  offender  shall  have  three  clear 
days'  notice),  which  shall  have  power  to  expel  such  member.  No  per- 
son so  expelled  shall  by  the  votes  of  a  majority  again  be  re-admitted, 
except  of  the  members  present  at  a  general  meeting;  nor  unless  notice 
has  been  given  at  the  last  previous  general  meeting  of  the  intention  to 
proi>ose  his  re-admission. 

Seal  of  the  Society. 

47.  The  seal  shall  have  for  a  device  as  follows :  "  a  figure  of  a  woman 
with  a  pair  of  scales  and  a  sword,  treading  on  a  serpent,  and  a  man 
with  a  pick  on  his  shoulder,  in  the  distance ; "  it  shall  be  in  the  custody 
of  the  president,  and  it  shall  be  used  only  when  directed  by  resolution 
of  the  committee  of  management,  a  muiute  of  which  resolution  shall 
be  duly  recorded  by  the  secretary.  , 

Investment  of  Capital. 

48.  The  committee  of  management  may  invest  any  part  of  the  capi- 
tal of  the  society  in  or  on  the  security  of  any  other  society  registered 
under  the  Industrial  and  Provident  Societies  Act,  1876,  or  under  the 
Building  Societies  Acts,  or  of  any  company  registered  under  the  Com- 
panies Acts,  or  incorporated  by  Act  of  Parliament,  or  by  charter,  and 
may  make  advances  to  members  upon  mortgage  of  freehold,  copyhold 
or  leaseliold  property,  upon  such  terms  as  agreed  upon,  provided  that 
no  such  investment  be  made  in  the  shares  of  any  society  or  company 
other  than  one  with  limited  liability,  and  may  make  any  such  invest- 
ment in  the  registered  name  of  the  society.  And  in  the  case  of  an  in- 
vestment on  the  security  of  any  such  society  or  company,  at  such  rate 
of  interest,  and  on  such  terms  as  to  repayment  or  otherwise,  as  may 
be  agreed  on.  And  all  such  investments  now  existing,  which  would 
have  been  valid  if  made  under  this  rule,  are  hereby  confirmed  and 
ratified  as  if  they  had  been  made  hereunder. 

BUILDING   DEPARTMENT. 

49.  The  committee  of  management  may,  subject  only  to  such  restric- 
tions and  limitations  as  shall  from  time  to  time  be  imposed  by  resolu- 
tion of  members  at  a  quarterly  or  monthly  meeting,  purchase,  or  hold 


0^  THE   ROCHDALE   EQUITABLE   PlONtlERS.  ^69 

upon  lease  or  mortgage,  any  lands,  together  with  the  buildings  thereon, 
and  may  build  or  erect  any  houses,  cottages,  or  other  buildings,  on  any 
lands  from  time  to  time  held  by  the  society,  whether  tor  the  purposes 
of  the  society  or  not,  and  may  alter,  pull  down,  and  again  rebuild  any 
building,  whether  erected  by  the  society  or  otherwise  vested  in  it ;  and 
may  manage,  lay  out,  lease  and  sub-lease  such  lands — either  at  rack 
rent  on  buildings,  mining,  quarrying,  or  improving  leases,  or  otherwise, 
howsoever— and  either  to  members  of  the  society  or  other  persons; 
and  may  dispose  of,  sell,  mortgage,  convey  or  reconvey,  either  to  mem- 
bers of  the  society  or  other  persons,  any  lands  or  buildings,  for  the 
time  being  held  by  the  society;  and  may  appropriate  to  the  use  of  the 
society  any  purchase  moneys  or  other  m.oneys  received  in  respect  of 
rents  of  any  lands  or  buildings. 

50.  The  committee  of  management  may,  subject  to  the  restrictions 
and  limitations  hereinbefore  mentioned,  advance  any  moneys  out  of 
tlie  society's  funds  to  members  of  the  society  on  the  security  of  lands 
or  buildings,  subject  to  such  scale  of  repayment  and  at  such  rate  of 
interest  as  is  hereinafter  mentioned,  no  such  advance  to  exceed  four- 
flfths  of  the  ascertained  value  of  the  said  security;  but  no  advance 
sliall  at  any  time  be  made  upon  the  security  of  any  property  that  shall 
be  subject  to  any  previous  mortgage.  * 

51.  As  soon  as  convenient  after  tlie  registration  of  these  rules,  and 
at  the  first  committee  meeting  after  the  ninth  day  of  January  in  each 
year,  the  committee  of  management  shall  appoint  two  competent  val- 
uers to  inspect  all  property  offered  as  security  to  this  society ;  and  any 
member  of  this  society  desirous  of  applying  for  any  advance  of  money 
from  this  society  to  assist  him  in  buying  land,  building  any  house, 
houses,  cottages  or  other  buildings,  or  desirous  of  effecting  a  mortgage 
Mp(m  any  land,  houses,  cottages,  or  other  buildings  already  erected, 
sliall  give  notice  in  writing  to  the  committee  of  management,  wliosliall 
Instruct  the  valuers  to  inspect  the  said  property,  or  in  case  of  buildings 
not  erected  shall  examine  tlie  plans  and  specifications  of  the  buildings 
proposed  to  be  erected,  and  the  valuers  shall  furnish  a  written  report 
tliereon  to  the  committee  of  management;  upon  forms  provided  for 
tliat  purpose,  within  six  days,  of  all  matters  pertaining  to  such  prop- 
erty. Tiie  said  report  shall  contain  the  following  particulars :— 1st.  The 
name  of  the  person  or  persons  making  tlie  application.  2d.  The  situa- 
ti(m  of  the  property  offered  as  security,  giving  number  of  house  and 
name  of  street  wlien  practicable.  3d.  Tlie  number  of  yards  of  land, 
with  a  pen  and  ink  plan  of  its  shape,  and  particulars  of  the  Iwundaries. 
4tli.  Whetlier  the  land  is  leasehold,  oopyliold  or  freehohl,  and  wliat  is 
tlie  term  for  which  it  is  held ;  and,  if  leasehold,  what  is  the  date  of  tlie 
lease.  5th.  What  is  the  annual  ground  or  chief  rent,  or  other  charge, 
if  any,  upon  the  property,  fith.  What  Is  the  value  of  the  property,  or, 
in  case  of  buildings  not  erected,  what  will  be  the  value  of  the  property 
when  the  said  buildings  are  completed. 

52.  When  the  committee  of  management  shall  be  satisfied  with  tlie 
lands  or  buildings  so  to  be  offered  as  aforesaid  are  <a  sufficient  security^ 
and  when  the  member  to  whom  the  said  land  and  buildings  b(>loiig 
shall  have  executed  a  mortgaee  or  assurance  of  the  said  lands  or  build- 
ings in  such  form  as  shall  be  deemed  to  be  sufficient  secTirlty  by  tlie 
committee  of  management  for  the  time  being,  under  the  advice  of  their 
solicitor,  they  shall  direct  the  president  and  secretary  to  pay  to  such 


270  MODEL  KULES  AND  WORKING  BY-LAWS 

member  the  sum  or  sums  of  money  he,  or  she,  or  they  shall  be  entitled 
to  receive,  and  the  president  siiall  take  charge  of  the  said  deed,  and 
all  other  deeds  relating  thereto,  and  deposit  the  same  in  the  society's 
fire-proof  safe,  as  a  security  to  the  society  tliat  the  said  advanced 
moneys  shall  be  repaid  according  to  the  conditions  and  regulations 
hereinafter  mentioned. 

53.  If  any  member  of  the  society,  before  applying  for  an  advance  of 
money,  shall  be  desirous  of  ascertaining  what  sum  of  money  the  com- 
mittee of  management  are  willing  to  lend  upon  any  property,  notice 
shall  be  given  to  thr  valuers  in  manner  beforementioned,  and  the  val- 
uers sliall  inspect  the  said  property,  and  make  their  report  thereon  to 
tlie  committee  of  management,  and  tlie  committee  shall  make  known 
to  the  said  person  the  sum  tliey  will  advance  thereon  on  tlie  conditions 
herein  contained,  and  the  person  on  whose  behalf  the  inspection  and 
valuation  has  been  made  shall  pay  all  the  expenses  thereof,  whether  a 
loan  is  efifected  or  not. 

54.  Every  member  to  whom  an  advance  of  money  slsall  have  been 
made  on  the  security  of  any  land  or  building  which  is  subject  to  the 
payment  of  any  yearly  or  half-yearly  ground  or  chief  rent,  or  other 
annual  charge,  shall,  whenever  required  so  to  do,  furnish  to  the  secre- 
tary of  the  society  a  statement  containing  the  amount  of  such  ground 
or  chief  rent,  or  other  payment,  the  times  at  which  they  are  respect- 
ively required  to  be  paid,  and  the  names  and  residences  of  the  persons 
entitled  to  receive  the  same,  and  shall  from  time  to  time,  if,  and  when- 
ever so  required,  produce  to  the  secretary  of  the  society  for  the  time 
being,  a  receipt  or  voucher  showing  that  the  said  payments  have  been 
duly  made;  and  If  the  said  receipt  or  voucher  shall  not  have  been 
produced  as  required,  the  secretary  shall  ascertain  from  the  person 
entitled  to  receive  the  said  ground  or  chief  rent  or  other  payments, 
whether  they  have  been  duly  received,  and  if  not,  then  he,  the  secre- 
tary, shall  forthwith  pay  the  same  out  of  the  society's  funds,  and  the 
amount  thereof  shall  be  debited  to  the  account  of  the  person  to  whom 
the  advance  has  been  made,  together  with  a  fine  of  one  dollar  and 
twenty-flve  cents,  and  any  other  reasonable  expenses  to  which  the  sec- 
retary, in  the  payment  thereof,  shall  have  been  subject,  by  reason 
either  of  the  non-production  of  the  receipts  or  the  non-payment  of  the 
said  rent  or  charges. 

5.5.  In  the  case  of  any  member  having  made  an  agreement  with  the 
committee  of  management  as  to  the  amount  to  be  advanced  on  any 
building  about  to  be  erected,  or  in  course  of  erection,  and  having  exe- 
cuted such  deed  of  mortgage  or  assurance  as  beforementioned,  the  said 
member  shall  be  entitled  to  receive  a  proportionate  part  of  the  advance 
agreed  tipon  when  the  said  buildings  shall  have  been  raised  to  the 
height  of  the  first  floor,  a  proportionate  part  thereof  when  they  shall 
be  covered  in  or  fully  slated,  and  the  remaining  portion  when  the  said 
buildings  shall  be  completed  according  to  the  plans  and  specifications 
thereof,  subject  nevertheless  to  the  same  Inspection  and  approval  as 
premises  already  built. 

56.  Should  any  member  of  this  .society  to  whom  an  advance  of  money 
has  been  made  from  the  funds  of  this  society,  on  the  security  of  prop- 
erty given  as  hereinbefore  mentioned,  leave  any  building  upon  which 
the  said  money  shall  have  been  advanced,  unfinished,  or  begin  to  pull 
down,  remove,  damage,  or  carry  away  the  same,  or  any  part  thereof, 


OF  THE   ROCHDALE  EQUITABLE  PIOifEERS.  271 

or  cause  or  procure  the  same  or  any  part  thereof  to  be  pulled  down, 
removed,  or  carried  away  to  the  prejudice  of  tliis  society,  or  tlie  secur- 
ity given,  tlie  committee  of  management  sliall  be  at  liberty  forthwith 
to  take  possession,  and  either  to  sell  such  premises  at  the  cost  of  such 
member  or  to  employ  such  person  or  persons  as  they  shall  think  fit  to 
finish  and  complete  the  same  out  of  the  funds  of  the  society,  and  charge 
the  cost  of  completion  to  the  debit  of  the  member  to  whom  the  advance 
has  been  made. 

57.  All  property  mortgaged  to  this  society  shall  be  regularly  insured 
against  loss  by  fire  by  the  committee  of  management,  in  the  society's 
name,  with  such  company  or  office  as  they  shall  think  fit,  and  for  such 
sum  or  sums  as  shall  be  agreed  upon  between  the  member  and  the  said 
committee,  but  not  less  than  the  full  amount  as  shall  from  time  to  time 
be  owing  upon  the  said  mortgage.  The  mortgagor  shall  pay  the  costs 
of  the  said  insurance  and  of  the  annual  renewals  thereof,  on  or  before 
the  ninth  day  of  the  month  next  ensuing  after  the  same  shall  be  due, 
and  in  default  thereof  shall  pay  the  same  penalty  as  for  arrears  of 
repayment  and  interest,  as  is  hereinafter  provided.  The  mortgagor 
shall  also  give  to  the  committee  of  management  a  written  notice  of 
any  and  every  trade  or  manufacturing  process  carried  on  in  any  of 
the  mortgaged  premises,  or  of  any  stove,  furnace,  or  other  article 
erected  therein,  which  will  in  the  least  affect  the  validity  of  the  policy 
of  insurance  in  force  before  the  commencement  of  such  trade,  or  before 
the  erection  of  such  stove,  furnace,  article  or  thing,  or,  in  default  there- 
of, shall  be  fined  one  dollar  and  twenty-five  cents  per  week  during  the 
time  which  such  notice  is  withheld.  Whenever  any  property  mort- 
gaged to  this  society  has  sustained  damage  by  fire,  the  committee  of 
management  shall  receive  the  amount  of  the  damage  so  sustained 
from  the  Insurance  office,  or  company,  and  shall  give  a  receipt  for  the 
same,  signed  by  the  president,  and  countersigned  by  the  secretary  for 
the  time  being,  which  shall  be  a  sufficient  discharge  to  the  insurance 
office  or  company  liable  by  virtue  of  any  policy  of  insurance.  The 
money  received  for  such  damage  shall  be  applied  to  the  payment  of 
tlie  amount  secured  by  the  mortgage  deed  of  the  damaged  premises,  or, 
if  the  committee  of  management  consider  it  expedient,  they  shall 
expend  such  money  In  repairing  such  damage. 

58.  Every  member  to  whom  an  advance  of  money  has  been  made  on 
the  security  of  lands  or  btilldings.  In  manner  hereinbefore  provided, 
shall,  on  or  before  the  ninth  day  of  every  calendar  month,  pay  at  the 
registered  office  of  the  .society,  to  such  person  <>r  persons  as  tlie  com- 
mittee of  management  shall  from  time  to  time  appoint,  no< /ess  than 
two  dollars  for  every  five  hundred  dollars  of  such  advanced  moneys, 
together  with  interest  not  to  exc'ced  five  per  cent  per  annum,  on  su<li 
portion  of  the  said  advance  as  shall  have  been  unpaid  on  the  ninth 
day  of  January  next  preceding,  reckoning  all  parts  of  pound.s  as  full 
pounds  in  the  calculation  of  such  interest.  And  every  borrower  shall, 
In  addition  to  the  beforementioned  payments,  pay,  on  the  ninth  day 
of  January  in  each  year,  a  further  sum  not  exceeding  fifty  cents  for 
every  five  hundred  dollars  of  the  original  amount  advanced  to  provide 
for  the  expense  of  conducting  this  department. 

59.  Should  any  member  neglect  to  pay  on  or  before  the  ninth  day 
of  each  and  every  month,  the  repayment  and  interest  due  according 
to  the  provisions  of  the  foregoing  rule,  together  with  all  arrears  of 


272  MODEL  RULES  AND  WORKING  BY-LAWS 


repayment  and  interest,  and  together  with  all  charges,  fines  and  pen- 
alties to  which  he  shall  from  time  to  time  become  liable,  according  to 
these  rules,  such  person  shall  be  charged  additional  interest  after  the 
rate  of  twopence  per  pound  for  every  month  [about  one  per  cent]  or 
part  of  a  month,  during  which  such  moneys  shall  be  in  arrear,  such 
additional  interest  to  be  calculated  upon  the  sum  of  the  several  arrears. 
And  should  any  person  neglect  to  pay  any  of  such  payments  and  inter- 
est or  any  part  or  parts  thereof  respectively,  it  shall  be  lawful  for  the 
committee  of  management,  in  their  discretion  and  at  any  time  after 
such  default,  to  enter  into  possession  of  the  property  which  has  been 
given  as  security  for  the  said  payments,  and  shall  cause  such  property 
tp  be  sold,  and  the  proceeds  of  such  sale  to  be  appropriated  in  liquida- 
tion of  the  debt  owing  to  the  society  on  the  said  security,  together 
with  the  expense  of  the  said  sale,  and  pay  the  balance  over  to  such 
persons  as  shall  be  legally  entitled  to  receive  the  same. 

60.  Any  member  to  whom  an  advance  of  money  shall  have  been 
made  on  the  security  of  any  lands  or  buildings,  desiring  to  dispose  of 
his  interest  in  such  lands  or  buildings,  may  transfer  such  interest, 
with  the  consent  of  the  committee  of  management  for  the  time  being, 
to  any  other  member  of  the  society.  All  such  transfers  shall  be  of 
such  form  and  executed  in  such  manner  as  the  committee  of  manage- 
ment for  the  time  being  shall  deem  necessary,  under  the  advice  of 
their  solicitor.  But  no  transfer  shall  be  made  of  any  property  held  on 
mortgage  by  this  society  unless  or  until  all  moneys  and  arrears  due  in 
respect  of  the  amount  advanced  upon  the  said  mortgaged  property 
shall  have  been  duly  made. 

61.  Any  member  to  whom  an  advance  shall  have  been  made  in  man- 
ner hereinbefore  provided,  may,  by  and  with  the  consent  of  tlie  com- 
mittee of  management  for  the  time  being,  substitute  any  other  security 
of  equal  value,  in  lands  or  buildings,  in  lieu  of  the  security  previously 
given,  on  payment  of  all  the  necessary  expense  in  respect  to  the  trans- 
fer of  the  said  security  or  securities. 

62.  When  any  member  to  whom  an  advance  of  money  shall  have 
been  made  out  of  the  funds  of  this  society,  on  the  security  of  any  mort- 
gage or  other  assurance,  shall  have  repaid  the  whole  of  such  advanced 
money,  together  with  all  an-ears  of  interest,  fines,  penalties  or  other 
charges  due  thereon,  according  to  these  niles,  the  committee  of  man- 
agement shall  authorize  a  receipt  to  be  given  under  the  hands  of  two 
members  of  the  committee,  countersigned  by  the  secretary  of  the  soci- 
ety for  the  time  being,  such  receipt  to  be  in  the  form  appended  to 
these  rules,  and  shall  be  annexed  to,  or  endorsed  upon,  siich  mortgage 
or  assurance,  and  shall  vacate  the  same  and  vest  the  estate  of  and  in 
the  property  therein  comprised  in  the  person  entitled  to  the  equity  or 
redemption  of  the  said  property. 

63.  Every  member  borrowing  money  from  this  society  in  accordance 
with  the  foregoing  rules  shall  pay  the  valuers'  fee  for  each  inspection 
of  the  property  offered  as  security.  And  the  said  person  shall  also  pay 
the  cost  of  all  deeds  of  mortgage  and  transfer  required  by  these  rules, 
in  addition  to  the  payments  hereinbefore  mentioned.  And  all  such 
deeds  shall  be  drafted  and  prepared  by  the  solicitor  appointed  by  the 
committee  of  management  for  the  time  being. 

64.  The  committee  of  management  shall  cause  to  be  provided  proper 
books  to  record  the  proceedings  of  this  department,  and  shall  cause  to 


OF  THE   ROCHDALE  EQUITABLE   PIONEEES.  273 

be  kept  a  separate  account  of  all  moneys  received  and  paid  on  account 
thereof,  and  the  auditors  of  the  society  for  the  time  being  shall  exam- 
ine all  accounts  belonging  thereto,  and  see  that  the  receipts  and  pay- 
ments are  properly  entered  in  the  books;  and  the  said  books  shall  be 
made  up  and  balanced  on  the  respective  quarter  days  of  the  societyt 
when  all  other  accounts  are  so  made  up  and  balanced;  and  the  result 
thereof,  so  far  as  respects  the  total,  shall  be  shown  from  quarter  to 
quarter  in  the  society's  balance  sheet. 

Construction  of  Rules. 

65.  In  construelng  these  rules,  words  importing  the  masculine  gen- 
der shall  be  taken  to  apply  to  a  female;  words  importing  one  person 
or  thing  only,  shall  be  taken  to  apply  to  more  than  one  person  or  thing; 
and  words  importing  a  class  shall  be  taken  to  apply  to  the  majority  of 
that  class,  unless  there  is  something  in  the  context  to  prevent  such  a 
construction. 

Application  for  Registrar's  Inspection. 

66.  It  shall  be  the  right  of  one-flf  th  of  the  total  number  of  members, 
or  if  the  number  of  members  shall  at  any  time  amount  to  1,000,  and 
shall  not  exceed  10,000,  it  shall  be  tlie  right  of  100  members,  or  if  the 
number  shall  at  any  time  exceed  10,000,  it  shall  be  the  right  of  500  mem- 
bers, by  an  application  in  writing  to  the  Chief  Registrar,  signed  by 
them  in  the  forms  respectively  provided  by  the  Treasury  Regulations 
In  that  behalf— 

(a)  To  apply  for  the  appointment  of  one  or  more  inspectors  to  exam- 
ine Into  the  affairs  of  the  society  and  to  report  thereon.— Industrial 
and  Provident  Societies  Act,  1876,  s.  15.  (1  a.) 

(b)  To  apply  for  the  calling  of  a  special  meeting  of  the  society.— In- 
dustrial and  Provident  Societies  Act,  1876,  s.  15.  (1  b.) 

Either  such  application  to  be  made  upon  such  notice  to  the  society, 
and  to  be  supported  by  such  evidence  for  the  purpose  of  showing  tliat 
the  applicants  have  good  rea-son  for  requiring  such  inspection  to  be 
made,  or  meeting  to  be  called,  and  that  they  are  not  actuated  by  mali- 
cious motives  in  their  application,  as  the  Chief  Registrar  shall  direct. 
—Industrial  and  Provident  Societies  Act,  1876,  s.  15.  (2.) 

67.  The  society  may  at  any  time  be  dissolved  by  the  consent  of 
three-fourths  of  the  members,  testified  by  llieir  signatures  to  some 
instrument  of  dissolution  in  the  form  provided  by  the  Treasury  RegTi- 
lations  in  that  behalf.— Industrial  and  Provident  Societies  Act,  1876, 
s.  17.  (1.) 


18 


By-Laws  of  Successful  American  Societies. 


THE  ALLEGAN  COUNTY  SOCIETY. 
[See  Pages  105-114.] 

The  Cooperative  Association  of  the  Patrons  of  Hus- 
bandry of  Allegan  County,  Mich.,  has  a  president, 
vice-president,  secretary  and  treasurer,  who,  according  to 
the  articles  of  association,  shall  hold  their  offices  for  the 
term  of  one  year  or  until  their  successors  shall  be  duly 
elected  and  qualified.  The  same  is  true  of  the  board  of 
not  less  than  10  or  more  than  20  directors,  who  shall 
manage  the  affairs  of  the  corporation.  "The  officers 
and  directors  shall  be  elected  in  each  and  every  year  at 
the  annual  meeting  of  the  stockholders."  Paragraph  12 
of  the  articles  of  association  is  identical  with  the  first 
of  the  by-laws.     The  by-laws  follow  : 

1.  Members. — Any  person  of  good  standing  in  the  order  of  the  Patrons 
of  Husbandry,  may  become  a  member  of  the  association  by  purchasing 
one  or  more  shares  of  tlie  stock  thereof,  and  subscribing  to  the  articles 
of  association,  complying  with  the  requirements  of  the  same,  and  the 
by-laws  thereof. 

2.  Intoxicating  liquors  shall  not  be  kept  or  sold  at  the  store  or  place 
of  business  of  this  association. 

3.  Powers  of  Directors.— The  board  of  directors  of  this  association 
shall,  before  commencing  business,  and  from  time  to  time  thereafter, 
whenever  it  may  be  deemed  expedient,  elect,  appoint  or  employ  a 
purchasing  or  business  agent,  whose  duty  it  shall  be  to  make  or  attend 
to  making,  all  purchases  and  sales  of  goods,  wares  and  merchandise, 
for  the  use  and  benefit  of  the  association,  and  who  shall  receive  for 
services,  for  himself  and  assistants,  appointed  with  his  approval,  for 
whose  fidelity  he  shall  be  responsible,  such  compensation  as  may,  from 
time  to  time,  be  agreed  upon  by  himself  and  board  of  directors. 

4.  Executive  Committee.— Tiiere  shall  be  an  executive  committee  of 
three,  elected  annually  by  the  directors  from  their  number,  whose 
duty  it  shall  be  to  have  a  special  oversight  of  the  business  and  affairs 
of  the  association ;  to  advise  with  the  agent  and  officers ;  executing 
the  orders  of  the  board  of  directors,  and  never  acting  in  opposition  to 

274 


OF  THE  ALLEGAN  COUNTY   SOCIETY.  275 

their  expressed  wishes.  The  board  of  directors  and  executive  commit- 
tee, and  secretary,  shall  receive  for  services  necessarily  and  faithfully 
rendered,  the  sum  of  $1.50  per  day,  and  actual  and  necessary  expenses 
while  engaged  in  the  service  of  the  association.  Their  accounts  shall  be 
audited  by  the  board  of  directors. 

5.  The  Purchasing  Agent,  before  entering  upon  his  duties,  shall  give 
such  bonds  as  may  be  required,  and  approved  by  the  board  of  directors, 
for  the  proper  and  faithful  application  and  use  for  the  purposes  of 
this  association,  of  all  moneys  which  may  come  into  his  hands  as  such 
purchasing  agent,  which  bonds  shall  be  filed  with  the  chairman  of  the 
board  of  directors. 

6.  Inventory. — Tlie  executive  committee  and  purchasing  agent  shall, 
once  a  year,  make  an  inventory  of  all  the  property  and  effects  of  the 
association,  beginning  such  inventory  on  or  about  the  20th  day  of 
January  in  eacli  year,  and  shall  make  a  full  statement  of  the  amount 
of  purchases,  sales,  exchanges  and  profits,  and  all  business  transactions 
of  the  association  for  the  preceding  year,  which  statement  shall  be 
verified  by  the  oath  of  the  purchasing  agent,  and  copies  of  the  same 
mailed  to  each  director,  and  reported  in  full  to  the  stockholders  at 
their  annual  meeting. 

7.  Reports.— It  shall  be  the  duty  of  the  agent  of  the  association  to 
procure  and  exhibit  to  the  executive  committee  at  the  time  of  taking 
the  inventory,  bills  of  all  articles  purchased  by  him  for  this  associa- 
tion, also  an  account  of  all  sales  or  exchanges  made  by  him,  with 
account  of  daily  sales  to  each  purchaser,  together  with  the  name  of 
purchaser,  which  shall  be  entered  in  a  book  to  be  kept  by  him  for  that 
purpose. 

8.  The  purchasing  agent  shall,  on  the  first  Monday  of  each  month, 
mail  to  each  director  a  report  of  the  aggregate  sale  during  the  last 
preceding  month,  profits  on  sales,  together  with  a  statement  of  all 
expenses  incurred  in  carrying  on  the  business  during  that  time. 

9.  The  Secretary  of  the  association  shall  keep  a  book  containing  the 
names  of  all  stockholders,  alphabetically  arranged,  the  number  of 
shares  held  by  each  person,  together  with  a  stock  dividend  account 
Willi  each  of  them,  and  shall  perform  such  other  clerical  work  as  may 
pertain  to  his  position. 

10.  Certificates  of  Stock,  signed  by  the  president  and  secretary  of  th  Is 
association,  shall  be  given  to  each  stockholder,  which  shall  state  the 
number  of  shares  of  capital  stock  owned  by  the  person  holding  the 
certificate. 

11.  Certificates  of  stock  shall  be  deemed  personal  property,  and  may 
be  sold,  transferred,  and  assigned  by  the  owner  thereof,  and  the  pur- 
chaser of  a  certificate,  when  the  same  shall  be  properly  assigned  and 
transferred,  shall  be  entitled  to  all  iieneflts,  and  subject  to  all  liabili- 
ties as  the  original  stockholder,  provided,  however,  that  no  sale  of 
stock  certificate  shall  be  made  to  any  person  not  a  member  of  the 
Order  of  the  Patrons  of  Husbandry. 

12.  Prices  of  Goods.— The  executive  committee  and  purchasing  agent 
shall  determine,  from  time  to  time,  the  percentage  above  cost  at  which 
goods  shall  be  sold,  which  per  cent  shall  be  uniform  on  all  articles,  or 
variable,  as  they  may  deem  exjiedient,  but  such  percentage  shall,  in 
no  case,  be  more  than  four  per  <!ent  advance  on  cost. 

13.  Annual  Statrment.— At  each  annual  meeting  of  the  stockholders, 
the  directors  of  the  preceding  year  shall  exhibit,  and  make  to  them  a 


276  MODEL  BULES  AND  WORKING   BY-LAWS 


complete  statement  of  the  business  transactions  of  this  association  for 
sucli  year,  and  shall  instruct  the  secretary  to  give  an  order  to  each 
stockholder  for  interest  at  five  per  cent,  per  annum  on  the  amount  of 
his  stock  paid  in,  and  if  any  surplus  of  profit  still  remain,  it  shall  be 
left  in  the  hands  of  the  treasurer  as  a  sinking  fund. 

14.  Cash  Payments.— AW  purchases  and  sales  of  goods  shall  be  for 
cash,  or  ready  pay,  and  if  the  agent  shall  sell  goods  belonging  to  this 
association  on  credit,  said  agent  shall  be  held  responsible  for  payment 
of  the  same. 

15.  In  case  of  a  neglect  or  failure  to  elect  directors  on  the  day 
appointed  for  the  annual  meeting,  the  directors  shall  call  another 
meeting  as  soon  as  practicable  for  that  purpose,  of  which  at  least  two 
weeks'  public  notice  shall  be  given. 

16.  The  vice-president  shall  be  be  ex-oflftcio  chairman  of  the  board 
of  directors. 

17.  Special  Meetings  of  the  directors  or  stockholders  may  be  called 
by  the  executive  committee  whenever  in  their  judgment  it  may  be 
necessary,  and  the  secretary  of  this  association,  when  requested  by  tlie 
executive  committee,  shall  call  such  special  meeting,  mailing  twenty 
days'  notice  of  the  same  to  the  secretary  of  each  subordinate  grange 
represented  in  this  association. 

18.  Grange  Directors.— Each  subordinate  grange  holding  certificates 
of  the  capital  stock  of  this  association,  among  its  members,  to  the 
amount  of  two  hundred  dollars,  or  over,  shall  be  entitled  to  one 
director. 

19.  Place  of  Brisiness. —The  executive  committee  shall  procure  a  place 
in  which  to  carry  on  the  business  of  the  association,  and  may  effect 
an  insurance  on  the  goods  and  property  thereof  in  some  good,  reliable 
insurance  company. 

20.  Voting  Powers.— At  all  meetings  of  the  stockholders,  for  the 
election  of  officers,  each  stockholder  shall  be  entitled  to  one  vote  for 
the  first  share  of  stock  held  by  him,  and  one  vote  for  each  additional 
fifty  shares  owned  by  him  in  the  capital  stock  of  this  association. 

21.  Withdrawal. — Any  member  of  this  association  may  withdraw  his 
or  her  stock  therefrom  by  giving  to  the  secretary  six  months'  notice  of 
his  or  her  desire  to  make  such  withdrawal,  provided,  however,  that 
said  stock  shall  have  been  in  the  association  three  years. 

22.  Upon  the  withdrawal,  exclusion  or  removal  of  any  member  of 
this  association,  such  member,  by  surrendering  the  stock  certificate, 
shall  be  entitled  to  receive  from  the  treasury  the  amount  paid  for  such 
certificate,  with  all  arrears  of  interest,  within  six  months  after  such 
withdrawal,  exclusion  or  removal. 

23.  Upon  the  decease  of  any  member  of  this  association,  the  legal 
representatives  of  such  deceased  member,  on  their  written  request  to 
the  secretary,  and  by  the  surrender,  to  the  treasurer  of  the  stock 
certificate,  shall  be  entitled  to  receive  from  the  treasury  of  the  associa. 
tion  the  amount  paid  for  such  certificate,  with  all  arrears  of  interest, 
within  six  months  after  making  such  request  as  aforesaid. 

24.  Dissolution. — This  association  may  be  dissolved  at  six  months 
notice,  whenever  the  stockholders,  at  an  annual  or  special  meeting, 
shall,  by  a  majority  of  two-thirds  of  all  the  members,  express  a 
desire  for  its  dissolution. 


OF  THE  JOHNSOK   COUNTY  ASSOCIATION.  277 

25.  Regular  Meetings  of  the  board  of  directors  shall  be  held  on  the 
last  Saturdays  in  January  and  July,  in  each  year,  commencing  at  ten 
o'clock  a.  m. 

26.  Amendments. — These  by-laws  may  be  added  to,  altered  or 
amended  at  any  regular  meeting  of  the  board  of  directors,  or  any 
special  meeting  called  for  that  purpose,  subject  to  the  approval  of  the 
stockholders. 


RULES  OF  THE  JOHNSON  COUNTY   ASSOCIATION. 

[See  Pages  114-121.] 

I— NAME. 

This  association  shall  be  called  the  Johnson  County  Co-Operative 
Association,  No.  118,  of  the  Order  of  Patrons  of  Husbandry  at  Olathe,  in 
the  State  of  Kansas. 

II.— OBJECT. 

The  object  of  this  association  is  to  establish  and  maintain  general 
trade  in  merchandise,  farm  products  and  machinery,  for  the  mutual 
benefit  of  shareholders  and  customers. 

III.— OFFICE  AND  PLACE  OF  BUSINESS. 

The  office  and  place  of  business  of  this  association  shall  be  at  such 
places  as  this  association  shall  designate. 

IV.— MEMBERS. 

Any  member  of  the  Order  of  Patrons  of  Husbandry,  in  good  stand- 
ing, may  become  a  member  of  this  association  by  subscribing  and 
paying  for  at  least  one  share  therein,  and  by  signing  his  name  and 
place  of  residence  to  these  rules.  But  no  Patron  shall  continue  a  mem- 
ber unless  he  purchase  goods  from  this  association  to  the  amount  of 
twenty  dollars  per  year  (subordinate  granges  and  single  men 
excepted). 

v.— LIST  OF  MEMBERS. 

A  correct  list  of  each  member's  name,  pl.ace  of  residence,  postofflce 
address,  and  name  of  grange  to  which  he  belongs  shall  be  kept  at  the 
office  of  this  association,  signed  by  the  secretary,  and  open  to  the 
Inspection  of  any  member;  and  no  Patron  shall  be  deemed  a  member 
for  the  purpose  of  receiving  any  interest  on  his  shares,  or  any  dlvlden<l 
of  profits,  or  of  voting,  until  his  name  appears  on  such  list. 

VI.— CAPITAL. 

The  capital  of  this  .association  shall  not  exceed  8100,000,  and  sliali  be 
raised  in  shares  of  $5,  which  shall  not  be  transferable  except  to  mem- 
bers of  this  association. 

When  a  member  assigns  a  share,  the  assignment  shall  be  Indorsed 
on  the  back  of  the  certificate,  and  the  same  shall  be  surrendered  to  X\n: 
directors  before  a  new  certificate  can  be  issued  to  the  assignee. 

VII.— NUMBER  OF  SHARES. 

No  member  shall  hold  more  than  two  hundred  shares  in  the  capital 
of  this  association. 


MODEL  RULES  AND  WORKING  BT-LAWS 


Vni.— REDUCTION  OF  SHARES. 

Should  the  directors  have  more  money  on  hand  than  they  can 
profitably  invest  in  the  business  of  tlie  association,  tliey  shall  have 
power  to  reduce  the  number  of  shares  by  purchasing  such  number  of 
shares  as  may  be  necessary,  at  the  rate  of  Ave  dollars  per  share, 
together  with  interest  thereon,  at  the  established  rate  since  the  last 
dividend  of  interest,  the  members  having  the  greatest  number  of 
shares  being  the  first  required  to  sell. 

IX.— NOTICE  OF  WITHDRAWAL. 

Members  may  withdraw  any  sum  over  twenty-five  dollars  according 
to  the  following  scale,  subject  to  the  discretion  of  the  directors;  $25.00 
to  $50.00  on  demand ;  $50.00  to  $100.00  in  30  days ;  $100.00  to  $200.00  in  60 
days ;  $200.00  to  $500.00  in  90  days. 

X.— WITHDRAWAL  OR  EXCLUSION. 

Any  member  may  withdraw  from  this  association,  and  any  mem- 
ber shall  be  excluded  who  ceases  to  be  a  member  of  the  Order  of 
Patrons  of  Husbandry. 

XI.— CAPITAL  RETURNED. 

Upon  the  withdrawal  or  exclusion  of  any  member,  he  shall  receive 
payment  of  the  capital  advanced  by  him,  with  all  arrears  of  interest 
and  profife,  If  any,  within  six  months  after  such  withdrawal  or 
exclusion. 

Xn.— DISTRESS. 

Any  member  being  in  distress  may  withdraw  any  sum  he  may  have 
in  the  funds  of  this  association  above  five  dollars,  at  the  discretion  of 
the  directors. 

XIII.— DECEASE  OF  MEMBERS. 

Upon  the  decease  of  any  member,  the  directors  may  repay  to  the 
legal  representatives  of  such  deceased  member  all  the  capital  owned 
by  such  member  at  the  time  of  his  decease  together  with  all  arrears  of 
interest  and  dividends  of  profits,  within  six  months  after  his  decease. 

XIV.— REDUCTION  OF  STOCK. 

The  fixed  stock  shall  be  reduced  as  follows,  viz:  Ten  per  cent,  per 
annum  on  fixtures  and  two  and  a  half  per  cent,  on  storehouses  shall  be 
deducted  quarterly  from  their  value,  as  shown  in  the  books  of  this 
association. 

XV.— PROFITS. 

The  net  profits  of  all  business  carried  on  by  said  association,  after 
paying  the  expenses  of  management,  making  the  proper  reduction  in 
value  of  fixed  stock,  and  paying  the  interest  on  the  capital  thereof,  as 
aforesaid,  shall  from  time  to  time  be  applied,  by  vote  of  the  associa- 
tion, at  the  quarterly  meeting  of  tlie  association,  either  to  increase  tiie 
capital  or  business  of  the  association,  or  for  any  educational  or  provi- 
dent purposes  authorized  by  the  association,  and  the  remainder  shall 
be  divided  among  those  who  have  purchased  goods  from  the  association 
during  the  preceding  quarter  (to  non-members  one-half  the  proportion 
of  members),  in  proportion  to  the  amount  of  purchases  during  the 
quarter. 

XVI.— DIVISION  OF  PROFITS. 

Each  member  shall  receive  out  of  the  surplus  profits  of  the  associa- 
tion, after  providing  for  the  expenses  thereof,  in  each  quarter,  interest 


OF  THE  JOHNSON  COUNTY  ASSOCIATION.  279 

not  exceding  ten  per  cent,  per  annum  upon  the  capital  standing  to  liis 
credit  in  the  books  of  the  association  as  is  declared  at  tlie  quarterly 
meetings  of  the  association. 

XVII.— OFFICERS. 

The  officers  of  this  association  shall  consist  of  a  president,  secretary, 
treasurer,  and  eight  directors,  and  two  auditors.  The  president  and 
secretary  shall  be  directors  ex-offlcio. 

XVIII.— ELECTION  OF  OFFICERS. 

The  president,  secretary,  treasurer,  one-half  of  the  directors  and 
one  of  the  auditors,  shall  be  elected  at  the  quarterly  meeting  in  Janu- 
ary, or  at  the  next  regular  meeting  thereafter,  and  the  remainder  at 
the  quarterly  meeting  in  July,  or  at  the  next  regular  meeting  there- 
after, and  shall  hold  their  several  offices  for  the  term  of  one  year,  and 
until  others  are  elected. 

XIX.— ELIGIBILITY. 

No  member  shall  be  eligible  for  the  office  of  director  (except  at  the 
first  and  second  elections  after  the  organization)  who  has  not  been  a 
member  six  months;  and  no  member  shall  be  eligible  for  the  office  of 
president  (after  the  first  election)  who  has  not  been  a  director  in  the 
association. 

XX.— ELECTIONS. 

All  elections  shall  be  by  ballot. 

XXI.— VACANCIES. 

All  vacancies  shall  be  filled  temporarily  by  the  directors  until  the 
next  regular  meeting,  when  such  vacancies  shall  be  filled  by  the 
association.  '< 

XXII.— MANAGEMENT  OF  BUSINESS. 

The  directors  shall  have  the  general  management  and  supervision 
of  the  business  of  the  association ;  shall  appoint  the  salesmen  and 
other  employes,  and  shall  assign  to  them  such  duties  and  compensation 
as  the  directors  may  think  fit. 

XXIII.— DIRECTORS. 

The  directors  shall  meet  at  such  times  and  places  as  the  association 
may  designate. 

A  majority  of  the  directors  shall  constitute  a  quorum. 

The  directors  shall  in  all  things  act  for  and  in  the  name  of  the 
association,  and  all  acts  and  orders  of  the  directors  under  the  powers 
delegated  to  them  shall  have  like  force  and  effect  as  if  they  were  the 
acts  and  orders  of  a  majority  of  the  members  of  the  association  at  a 
regular  meeting  thereof. 

All  questions  at  such  directors'  meeting  shall  be  decided  by  a 
majority  of  votes. 

Any  two  of  the  directors  may  call  a  special  meeting  thereof  by 
giving  three  days'  notice  in  writing  to  the  secretary,  but  no  business 
shall  be  transacted  at  such  special  meeting  except  that  specified  in  the 
notice. 

The  directors  shall  convene  the  meetings  of  the  association  as  is 
herein  mentioned,  and  shall  cause  the  accounts  of  all  ])iisiness  carried 
on  in  behalf  of  the  association  to  be  regularly  entered  In  projx'r  books, 
and  shall  cause  a  statement  of  the  accounts  of  the  association,  with  all 
necessary  vouchers,  up  to  the  hist  day  of  the  previous  quarter,  or  ten 


280  ItODBL  EXILES  AND  WORKINO  BY-LAWS 

days  before  the  quarterly  meeting,  to  be  made  out  and  laid  before  the 
auditors  not  less  than  ten  days  before  the  quarterly  meeting  of  the 
association. 

All  committees  shall  be  subject  to  the  directoi-s. 

XXIV.— MANNER  OF  CONDUCTING  BUSINESS. 

All  money  received  on  ac<!ount  of  shares,  contributions  or  other- 
wise, shall  be  paid  to  the  treasurer,  unless  otherwise  ordered  by  the 
Association,  and  shall  be  withdrawn  only  on  the  written  order  of  the 
president,  countersigned  by  the  secretary,  by  a  vote  of  the  directors; 
and  so  much  of  the  funds  of  the  association  as  are  not  wanted  for 
immediate  use,  or  to  meet  the  accruing  liabilities,  shall,  with  the 
consent  of  the  association  at  any  regular  meeting,  be  invested  by  the 
directors. 

The  business  of  the  association  shall  be  conducted  for  cash.  All 
patrons  trading  with  this  association  shall  be  furnished  with  checks 
representing  the  amount  of  their  purchases. 

XXV.— INVESTMENTS. 

This  association  may  invest  such  portions  of  its  surplus  capital  in 
any  wholesale  cooperative  association  as  the  association  may  determine, 
notice  of  the  same  having  been  given  in  writing  at  a  previous  regular 
meeting;  and  such  investment  shall  be  made  under  the  supervision  of 
the  directors. 

XXVI.— CHAIRMAN. 

The  president  shall  preside  at  all  meetings  of  the  association  and  of 
the  directors,  and  in  his  absence  a  chairman  shall  be  elected  pro-tem 
from  tj^e  directors. 

The  chairman  shall  sign  officially  all  contracts ;  also  the  records  of 
proceedings  of  all  meetings  of  the  association  and  of  the  directors. 

XXVII.— SECRETARY. 

The  secretary  shall  attend  all  meetings  of  the  association  and  of  the 
directors;  summon  all  special  meetings  of  the  directors;  keep  a  correct 
record  of  the  proceedings  thereof;  shall  sign  the  same  officially;  shall 
countersign  all  contracts ;  and  shall  on  all  occasions,  in  the  execution 
of  the  duties  of  his  office,  act  under  the  direction  and  control  of  the 
directors. 

An  assistant  secretary  may  at  any  time  be  appointed  by  the 
directors. 

XXVIII.— TREASURER. 

The  treasurer  shall  be  responsible  for  the  money  paid  to  him  on 
account  of  the  association.  He  shall  balance  his  cash  account  week- 
ly, and  furnish  the  secretary  with  a  duplicate  thereof,  and  shall,  if 
required,  attend  any  meeting  of  the  association,  or  of  the  directors. 

XXIX.— SECURITY. 

BvBTy  person  appointed  to  any  office  requiring  the  receipt,  man- 
agement, or  expenditure  of  money,  shall,  before  entering  ni)on  the 
duties  of  his  office,  give  such  security  as  may  be  deemed  sufficient  by 
the  directors. 

XXX.— SALARIES. 

At  any  quarterly  meeting  of  the  association  the  majority  of  the 
members  present  may  assign  to  any  officer  of  the  association  such 
renumeration  or  salary  as  may  be  deemed  proper. 


OF  THE  JOHNSON  COUNTY  ASSOCIATION.  281 

XXXI.— DISQTTALIFICATIOK. 

Any  director  shall  vacate  his  office  if  he  holds  any  other  office  or 
place  of  profit  under  the  association,  except  such  as  may  be  assigned 
to  him  by  Rule  30,  or  if  lie  is  interested  or  participates  in  the  profits  of 
any  contract  witli  the  association.  But  no  director  shall  vacate  his 
office  on  account  of  being  a  member  of  any  company  or  association 
which  has  entered  into  contracts  witli  or  done  any  work  for  the  associ- 
ation of  which  he  is  a  director:  Provided,  that  such  director  shall 
not  vote  in  respect  to  such  contract  or  work. 

No  salesman  or  other  employe  of  this  association  shall  serve,  as  a 
director  or  auditor,  or  be  allowed  to  vote  for  any  officer  of  the 
association. 

XXXII.— AUDITORS. 

The  auditors  shall  audit  all  accounts  of  the  association,  and  see 
that  they  are  correctly  kept ;  and  shall  present,  at  each  quarterly  meet- 
ing, a  balance  sheet  of  all  the  receipts  and  disbursements,  and  also  of 
the  assets  and  liabilities  of  the  association,  signed  by  them,  together 
with  a  statement  of  the  affairs  of  the  association  since  the  last  quarter- 
ly meeting,  and  of  its  condition  then.  They  shall  have  authority  to 
call  for  and  examine  all  records,  vouchers,  papers  and  documents 
belonging  to  the  association. 

XXXIII.— REGULAR  MEETINGS. 

Regular  meetings  shall  be  held  on  the  second  Tuesday  in  the 
months  of  January,  April,  July  and  October,  and  at  such  other  times 
as  the  association  may  determine. 

The  first  regular  meetings  in  January,  April,  July  and  October  shall 
be  called  quarterly  meetings. 

XXXIV.— SPECIAL  MEETINGS. 

Special  meetings  may  be  called  by  the  directors,  or  by  a  majority 
of  the  members,  by  publishing  in  the  Kansas  Patron  at  least  ten  days 
before  the  time  of  meeting;  and  no  business  shall  be  transacted  at 
such  special  meeting  except  such  as  is  specified  in  the  notice  for  such 
meeting. 

XXXV.— PLACE  of  meeting. 

All  regular  meetings  shall  be  held  at  such  place  as  the  association 
shall  determine ;  or,  in  case  of  unforeseen  emergency,  at  such  place  as 
the  directors  may  designate. 

XXXVI.— quorum. 

One  hundred  members  shall  constitute  a  quorum. 

XXXVII.— EDUCATION  FUND. 

This  association  may  appropriate  two  and  one-half  per  cent  of  the 
net  profits  of  the  business  for  educational  purposes. 

XXXVIII.— COMPLAINTS. 

All  complaints  shall  be  made  to  the  directors  in  writing,  signed  by 
some  member  of  the  association ;  and  the  directors  shall  make  such 
Investigation  and  decision  thereon  as  they  shall  deem  proper,  subject 
to  an  appeal  to  the  next  regular  meeting  of  tlie  association,  whose 
decision  shall  be  final;  and  all  complaints  and  decisions  shall  be 
entered  In  a  book  to  be  kept  for  that  purpose, 
XXXIX.— SEAL. 

This  association  shall  have  a  seal. 


m 


MODEL  BULES   AND  WORKING   BY-LAWS 


XL.— ORDER  OF  BU8INKS8. 

1.  Calling  the  meeting  to  order.  2.  Reading  and  approving  tlie 
records  of  the  previous  meetings.  3.  Reports  of  tlie  officers.  4.  Re- 
ports of  committees.  5.  Unfinislied  business.  6.  New  business. 
7.    Closing. 

XLI.— VOTING. 

At  all  meetings  of  the  association,  or  of  the  directors,  each  mem- 
ber shall  have  one  vote  only. 

XLII.— AMENDMENTS. 

These  rules  may  be  amended  at  any  regular  meeting,  notice  there- 
of liavliig  been  given  in  writing,  signed  by  some  member,  at  a 
previous  regular  meeting. 

AMENDED  RULES. 

1.  All  dividend  tickets  must  be  presented  for  settlement  with 
vouchers  of  standing  within  sixty  days  after  dividend  is  declared  by 
quarterly  meeting,  or  otherwise  void. 

2.  Tickets  only  given  on  goods  bought  at  retail  price  for  the  use  of 
stockliolders  or  Patrons'  families. 


BY-LAWS  OF  THE  LYONS  COOPERATIVE  ASSOCIATION. 

L    Officers. 

Sec.  1.  The  officers  of  this  company  shall  be  a  president,  a  secretary, 
at  treasurer,  six  directors,  who  shall  constitute  the  board  of  managers, 
and  two  auditors. 

Sec.  2.  The  president  shall  preside  at  all  meetings  of  the  company 
and  of  the  board ;  he  shall  sign  all  contracts ;  also  tlie  minutes  of  the 
proceedings  of  all  the  company's  meetings.  In  the  absence  of  tlie 
president  a  chairman  sliall  be  elected  pro  tern  from  the  directors,  who 
shall  perform  all  the  duties  of  the  president  during  his  absence. 

Sec.  3.  The  secretary  shall  attend  all  meetings  of  the  company  and 
of  the  board  of  directors;  summon  all  special  meetings;  and  keep  a 
correct  record  of  the  proceedings  thereof;  he  shall  countersign  all  con- 
tracts; receive  proposals  for  admission,  and  keep  the  accounts  and 
papers  of  the  company  in  such  manner  as  the  board  of  directors  may 
direct;  he  shall  prepare  all  quarterly  reports,  receive  all  moneys  due 
the  company,  and  at  the  close  of  every  evening  pay  the  same  to  the 
treasurer.  He  shall  be  governed  in  the  duties  of  his  office  by  the 
board  of  managers. 

Sec.  4.  The  treasurer  shall  be  responsible  for  all  moneys  paid  to  him 
on  account  of  the  company;  he  shall  pay  the  ordinary  bills  of  the 
company  under  the  direction  of  the  board  of  managers;  balance  his 
accounts  weekly,  and  furnish  the  secretary  a  duplicate  thereof;  and 
attend  all  meetings  of  the  company. 

Sec.  6.  The  board  of  managers  shall  meet  every  Wednesday  evening 
at  eight  o'clock;  any  six  members  shall  constitute  a  quorum.  It  shall 
In  all  things  act  for  and  in  the  company's  name,  and  acts  and  orders 
under  the  powers  delegated  to  it  shall  have  the  same  force  and  effects 
as  if  they  were  the  acts  and  orders  of  a  majority  of  the  members  of  the 


OF   THE    LYONS    COOPERATIVE    ASSOCIATION.        283 


company  at  a  general  meeting  thereof.  Every  question  at  such  meeting 
shall  be  decided  by  a  majority  vote  of  the  whole  board  of  managers; 
any  two  of  the  board  may  call  a  special  meeting  thereof  by  giving  one 
clear  day's  notice  to  the  secretary.  But  at  such  special  meeting  no 
other  business  but  that  specified  in  the  notice  shall  be  taken  into  con- 
sideration. The  board  shall  convene  all  meetings  of  the  company  on 
such  requisitions  as  are  herein  mentioned  and  shall  cause  accounts  of 
all  business  carried  on  in  behalf  of  the  company  to  be  regularly  enter- 
ed in  proper  books,  and  shall  cause  a  statement  of  the  accounts  of  the 
company,  with  all  necessary  vouchers  up  to  the  21st  day  of  July, 
October,  January  and  April  in  each  year,  to  be  made  out  and  laid 
before  the  persons  appointed  to  audit  the  same  not  less  than  five  days 
before  the  day  appointed  for  the  quarterly  meetings  of  the  company ; 
all  committees  which  are  or  may  be  found  in  connection  with  this 
company  shall  be  subject  to  the  board  of  managers,  said  board  being 
ex-offlcio  members  of  all  committees  and  they  shall  see  that  the  laws 
of  the  company  are  strictly  adhered  to.  The  auditors  shall  audit  the 
accounts  of  the  company  and  see  that  they  are  correctly  kept,  and  shall 
lay  before  each  quarterly  meeting  a  balance  sheet  of  all  receipts  and 
disbursements  and  also  of  the  assets  and  liabilities  of  the  company 
signed  by  them,  together  with  a  statement  of  the  affairs  of  the  company 
since  the  last  quarterly  meeting  and  its  then  condition;  they  shall 
have  authority  to  call  for  and  examine  all  records,  vouchers,  papers 
and  documents  belonging  to  the  company. 

II.    Members. 

Sec.  1.  The  company  shall  consist  of  all  members  who  shall  have 
subscribed  to  these  by-laws  and  who  have  paid  at  least  five  dollars 
into  the  capital  stock  of  the  association. 

Sec.  2.  Application  for  membership  must  be  accompanied  by  the 
recommendation  of  at  least  one  member  of  the  company  and  by  the 
membership  fee,  which  is  one  dollar.  The  name,  address  and  occupa- 
tion of  every  applicant  for  membership  must  be  posted  in  a  con- 
spicuous place  in  tlie  company's  store  at  least  one  week  before  being 
voted  upon  by  the  board  of  managers,  whose  approval  admits  to  mem- 
bership; in  case  of  rejection  the  membership  fee  shall  be  returned. 

Sec.  3.  In  case  of  admission  each  applicant  shall  pay  at  least  one 
share  before  being  entitled  to  the  privilege  of  membership,  and  at  least 
fifty  cent*  per  month  thereafter  until  he  shall  own  five  shares,  shall 
sign  these  regulations,  which  signing  shall  constitute  a  contract 
between  the  member  and  the  company. 

m.  Election  of  Officers. 
Sec.  1.  The  president,  secretary,  treasurer,  three  directors  and  one 
auditor  shall  be  elected  at  the  annual  meeting  of  the  company,  and 
three  directors  and  one  auditor  at  the  semi-annual  meeting  who  sliall 
hold  their  respective  offices  for  the  term  of  one  year  and  until  their 
successors  are  elected  and  qualified— except  at  the  first  election,  when 
all  the  officers  shall  be  elected— three  of  the  directors  and  one  auditor 
to  serve  six  months  only.  No  member  shall  be  eligible  to  otfice  of 
director  (except  at  the  first  election)  who  has  not  been  a  member  six 
months  and  no  member  shall  be  eligible  for  the  office  of  president 
(except  at  the  first  election)  who  has  not  been  a  director  or  fli-st  presi- 
dent of  the  company.  All  elections  shall  be  by  ballot  and  a  majority 
vote  of  all  the  votes  cast  shall  be  necessary  to  elect. 


284  MODEL  RULES  AND  WOBKIISTG  BY-LAWS 


rv.    Meetings. 

Sec.  1.  The  regular  meetings  of  the  company  shall  be  held  on  the 
second  Wednesday  after  the  first  Saturday  of  the  months  of  August, 
November,  February  and  May  of  each  year.  The  meeting  in  August 
shall  be  called  the  annual  meeting;  in  February  the  semi-annual  meet- 
ing, and  the  meetings  in  November  and  May  the  quarterly  meetings. 

Sec.  2.  Special  meetings  may  be  called  by  the  board  of  managers, 
or  on  petition  of  ten  members,  three  days'  notice  to  be  given  such  calls 
shall  clearly  set  forth  the  object  of  the  special  meeting  and  no  other 
business  shall  be  transacted  thereat. 

Sec.  3.  Ten  members  shall  constitute  a  quorum  at  any  meeting;  each 
member  shall  have  but  one  vote.    Proxy  votes  shall  not  be  allowed. 

V.    Shares. 

Sec.  1.  A  share  register  shall  be  kept  in  which  shall  be  entered  the 
Christian  and  surname,  residence,  occupation  and  date  of  entrance  of 
each  member  of  the  company,  the  number  of  shares  held  by  each 
member  with  the  number  and  value  of  each  share,  the  date  when  the 
member  became  such  with  such  other  particulars  as  the  board  of  man- 
agers may  deem  necessary  to  afford  a  clear  and  accurate  view  of  the 
stock  of  the  company. 

Sec.  2.  The  transfer  of  all  shares  shall  be  registered  In  a  similar 
way.  Any  member  not  giving  his  proper  address  on  entrance  or 
removal  of  residence  to  the  secretary  shall  be  fined  twenty-five  cents, 

Sec.  3.  No  member  shall  be  allowed  to  hold  more  than  forty  shares 
in  the  funds  of  the  company.  No  member  shall  be  paid  any  dividends 
in  cash  or  trade  until  he  own  ten  paid  up  shares  (provided  the  shares 
are  not  all  taken  by  members)  when  he  may  receive  either  at  his 
pleasure.  The  secretary  shall  keep  a  book  in  which  a  member  may 
nominate  in  writing  any  person  to  whom  his  shares  shall  be  transferred 
at  the  time  of  his  death.  The  board  of  managers  may,  if  they  think  fit, 
instead  of  making  such  transfer,  pay  to  the  person  so  nominated  the 
full  pay-up  value  of  the  interest  of  the  member  at  the  time  of  his 
death. 

Sec.  4.  Upon  the  death  of  a  member  of  the  company,  his  legal  repre- 
sentative shall,  within  fifteen  days,  notify  the  secretary  in  writing 
stating  the  Christian  and  surname,  residence  and  occupation  of  the 
deceased,  with  satisfactory  proofs  of  death,  in  order  that  the  share  or 
shares  of  the  deceased  member  may  be  registered  in  the  name  of  such 
legal  representative.  Members  may  assign  and  transfer  shares  sub- 
ject to  the  approval  of  the  board  of  managers. 

Sec.  5.  After  paying  the  expenses  of  management,  and  if  the  profits 
of  the  business  shall  warrant,  interest  will  be  paid  on  shares  at  the 
rate  of  eight  per  cent  per  annum,  payable  quarterly;  and  if  not,  then 
such  lesser  percentage  as  the  business  may  permit  and  the  board  of 
managers  may  determine.  Interest  shall  not  be  computed  on  fractional 
shares  nor  for  a  less  period  than  one  month.  Shares  accruing  before 
the  twentieth  of  the  month  shall  be  reckoned  as  in  for  the  full  month. 

VI.    Profits. 
After  paying  or  providing  for  expenses  of  management,  and  for  In- 
terest on  shares  and  setting  aside  at  the  rate  of  ten  per  cent  per  annum 
to  repair  the  deterioration  on  fixed  stock,  the  net  proceeds  of  all  busi- 
ness shall  be  divided  quarterly  among  the  members  of  the  company  In 


OF  THE   LYONS   COOPERATIVE   ASSOCIATION.        285 

proportion  to  the  amount  of  their  purchases  at  the  store  during  the 
quarter,  but  the  quarterly  meeting  shall  determine  what  percentage 
shall  be  paid  to  members  and  also  to  non-membere  if  they  deem  it 
advisable. 

"vn.   Bonds. 

Every  person  appointed  to  any  office  touching  the  receipt,  manage- 
ment and  expenditures  of  money  on  account  of  the  company  shall 
give  such  security  as  the  board  of  managers  may  deem  satisfactory 
when  so  required  of  said  board. 

VIII.    Management. 

Sec.  1.  The  board  of  managers  shall  have  the  general  management 
and  supervision  of  the  company;  shall  appoint  the  manager,  sales- 
men and  employes  and  shall  assign  to  them  such  duties  and  compen- 
sation as  they  may  deem  proper. 

Sec.  2.  The  board  of  managers  shall  frame  rules  for  the  manage- 
ment of  the  store  or  stores  and  any  other  branch  of  business  in  which 
the  company  may  engage;  subject  to  the  approval  of  the  regular 
meeting.  These  rules  cannot  be  altered  or  amended  except  by  a  two- 
thirds  vote  of  the  members  present  at  a  regular  meeting — fifteen  days* 
notice  having  been  given  by  display  in  the  store  of  the  company. 
IX.    Penalties. 

Sec.  1.  Any  member  failing  for  three  consecutive  months  to  pay  any 
fines,  debts,  or  other  sums  due  the  company  may  be  suspended  from 
participation  in  the  profits,  and  no  dividends  shall  be  declared  on 
purchases  not  paid  in  by  end  of  quarter  in  which  they  were  purchased. 

Sec.  2.  The  board  of  managers  shall  have  power  to  suspend  any 
member  whose  conduct  has  been  injurious  to  the  company  and  shall 
report  such  action  to  the  next  regular  meeting,  when  If  a  majority  of 
the  members  present  sustain  the  board  the  person  may  be  expelled. 
The  secretary  shall  give  the  accused  five  days'  notice  of  such  hearing. 

Sec.  3.    Expelled  members  shall  not  be  eligible  to  join  for  one  year. 

X.    Remuneration. 

Sec.  1.  At  any  regular  meeting  of  the  company  the  majority  of  the 
members  present  may  assign  to  the  committees,  auditors,  or  other 
officers  of  the  company  such  remuneration  as  seems  to  them  advisable. 

Sec.  2.  No  employe  of  the  company  shall  be  an  auditor  on  any 
account  whatever. 

Sec.  3.  Any  member  of  the  board  of  managers  shall  vacate  his  office 
if  he  is  cariying  on  the  same  business  as  the  company,  if  he  becomes 
bankrupt,  if  he  be  concerned  in  or  participates  in  the  profits  of  any 
contracts  with  the  company.  But  the  above  rules  shall  be  subject  to  the 
following  exceptions :  That  no  director  or  manager  shall  vacate  his 
office  by  reason  of  his  being  a  member  of  any  society  or  company  which 
has  entered  into  contract  with  or  done  any  work  for  the  company  of 
which  he  is  manager  or  director.  Nevertheless  he  shall  not  vote  in 
respect  to  such  work  or  contract;  and  if  he  does  so  his  vote  shall  not 
be  counted. 

Sec.  4.  No  director,  president,  secretary  or  treasurer  while  In  office 
shall  be  allowed  to  nominate  or  second  the  nomination  of  any  member 
to  serve  on  the  board  of  managers. 

XI.    Wording. 

In  construing  these  by-laws  words  importing  the  masculine  gender 
shall  be  taken  to  apply  to  females.    Words  Importing  one  person  or 


286  MODEL   RULES   AND   WORKING    BY-LAWS 


thing  shall  be  taken  to  apply  to  more  than  one  person  or  thing,  and 
words  importing  a  class  shall  be  taken  to  apply  to  the  majority  of  that 
class  unless  there  is  something  in  the  context  to  prevent  such 
construction. 

XII.  Moneys. 

All  sums  due  from  any  member  under  the  provisions  of  these  by-laws 
for  subscription  or  otherwise  shall  be  recoverable  from  him,  his 
executors,  or  administrators  by  legal  process  as  debt  due  to  the  com- 
pany ;  and  the  secretary  shall  lay  before  the  regular  meeting  a  return 
of  all  moneys  due  for  any  subscriptions  or  otlier  debts  due  to  the  com- 
pany; and  of  all  moneys  paid  to  every  member  under  the  provisions  of 
these  by-laws  since  the  last  of  such  returns  and  a  copy  of  each  of  such 
returns  shall  be  furnished  to  the  board  of  managers,  who,  on  the 
resolution  of  any  such  meeting  shall  take  such  proceedings  as  they 
deem  advisable  to  enforce  the  payment  of  any  sums  so  due. 

XIII.  Loans. 

The  board  of  managers  may  obtain  by  way  of  loan  from  any  person 
for  the  purpose  of  the  company  from  time  to  time  on  the  security  of 
bonds  or  promissory  notes,  signed  by  at  least  five  of  the  board  of 
managers  and  countersigned  by  the  secretary,  such  sum  or  sums  of 
money  as  any  special  or  regular  meeting  of  the  members  may  sanction, 
not  exceeding  two-flfths  of  the  amount  of  the  declared  capital  of  the 
company  at  such  rate  or  interest  and  subject  to  such  provisions  for 
repayment  as  are  agreed  upon  on  such  advance. 
XIV.    Payments. 

Should  the  board  of  managers  have  more  cash  on  hand  than  they  can 
profitably  invest,  they  shall  have  power  to  repay  all  loans  contracted 
under  the  thirteenth  article. 

XV.     WITHDRAWAUI. 

See.  1.  Members  may  withdraw  any  sum  of  money  over  fifty  dollars, 
provided  that  in  the  opinion  of  the  board  of  managers  the  funds  of  the 
company  will  so  allow. 

Sec.  2.  A  member  who  has  paid  up  all  his  shares  may  withdraw  from 
the  company  by  giving  notice  of  his  Intention  in  writing  to  the  secre- 
tary, and  any  member  may  withdraw  without  paying  up  all  his  shares 
with  the  consent  of  the  board  of  directors.  Upon  the  withdrawal  or 
exclusion  of  a  member  he  shall  receive  a  note  of  the  company  redeem- 
able in  six  months  bearing  interest  at  the  rate  of  eight  percent  per 
annum  for  the  amount  of  capital  paid  in  by  him  with  all  the  earnings 
of  said  capital. 

XVI. 

Any  member  being  in  distress  may  withdraw  any  sum  he  may  have 
in  the  funds  of  tlie  company  above  twenty  dollars  upon  peiinission 
being  given  by  the  board  of  directors. 

XVII.    Reserves. 

For  assuring  each  member  the  full  value  of  his  investment  all  undi- 
vided balances  or  profits  shall  be  paid  into  a  reserve  fund,  the  same  to 
be  invested  in  the  working  capital  of  the  company. 

XVIII.    Assessments.  * 

The  board  of  managers  shall  have  the  power  to  levy  assessments  for 
unpaid  balances  of  subscribed  stock,  not  to  exceed  twenty-five  cents 
per  week  for  each  member. 


OF  THE  LYONS  COOPERATIVE  ASSOCIATION.        287 


XIX.    Accounts. 

Sec.  1.  The  books  and  accounts  of  the  company  shall  be  opened  to 
inspection  of  the  members  at  all  reasonable  times. 

Sec.  2.  If  any  disputes  arise  betAveen  any  of  the  members  under  the 
rules,  or  between  members  and  tlie  managers  or  salesmen  in  the  store, 
the  same  shall  be  settled  by  the  board  of  directors  or  by  arbitration, 
and  any  member  refusing  to  submit  to  arbitration  shall  be  expelled. 

Sec.  3.  If  any  member  has  any  complaint  to  make  relative  to  the 
qualities  of  or  prices  charged  for  goods  tlie  same  should  be  presented 
to  the  board  of  managers,  who  shall  proceed  to  investigate  them. 

Sec.  4.    Any  member  may  likewise  send  to  the  board  of  managers 
suggestions  in  writing  for  carrying  into  better  effect  the  objects  of  the 
company  and  it  shall  be  the  duty  of  the  board  to  consider  the  same. 
XX.    Amendments. 

These  by-laws  may  be  amemded  at  any  regular  meeting  of  the  com- 
pany by  a  majority  of  the  members  present  and  voting,  provided 
that  a  notice  of  the  proposed  amendment  sliall  be  displayed  in  the 
store  fifteen  days  previous  to  such  meeting.  But  no  amendment  shall 
ever  be  entertained  to  allow  any  member  more  than  one  vote. 


BY-LAWS     OF     THE     TEXAS    COOPERATIVE     ASSOCIATION". 

I.    Membership. 

Section  1.  Any  cooperative  association  of  the  Patrons  of  Husbandry, 
or  subordinate  grange,  may  become  a  member  of  this  association  by 
subscribing  and  paying  for  one  or  more  shares  of  stock,  and  complying 
with  tlie  charter  and  by-laws,  and  shall  be  entitled  to  one  vote  in  the 
meetings  of  the  Texas  Cooperative  Association. 

Sec.  2.  Individual  members  of  the  Grange  in  good  standing  may 
become  members  of  this  association  by  paying  for  one  or  more  shares 
of  stock  and  by  complying  with  the  requirements  of  tlie  charter  and 
by-laws,  and  will  be  entitled  to  but  one  vote  in  his  own  right;  but  may 
cast  as  many  as  five  votes  by  written  proxies  for  other  members  of 
the  association. 

Sec.  3.  Liabilities.  Incorporators  and  shareholders  shall  be  liable 
for  debts  contracted  by  the  association  only  to  the  amount  of  shares 
held  by  them. 

IL    Meetings. 

Section  1.  The  Texas  Cooperative  Association,  Patrons  of  Husbandry, 
shall  meet  annually,  by  10  o'clock  a.  m.,  on  the  second  Wednesday  in 
January  of  each  year,  at  such  place  as  may  be  designated  by  a  majority 
vote  of  the  board  of  directors.  Special  meetings  of  the  association 
may  be  called  by  the  president  with  the  consent  of  a  majority  of  the 
board  of  directors.  No  business  shall  be  transacted  at  such  special 
meetings  except  that  specified  In  the  call. 

Sec.  2.  The  annual  meetings  of  the  board  of  directors  shall  be  held 
on  the  day  preceding  the  annual  meetings  of  the  association. 

Sec.  3.  Special  meetings  of  the  board  of  directors  may  be  called  by 
the  president  at  any  time  on  twelve  days'  notice  to  each,  which  notice 


288  MODEL  RULES  AND  WOEKING   BT-LAWS 

shall  be  sent  by  mail.    No  business  shall  be  transacted  at  such  special 
meetings  except  that  specified  in  the  notice. 

III.     QUORUM. 

Section  1.  At  all  meetings  of  the  association  fifteen  members  shall 
constitute  a  quorum,  exclusive  of  individual  proxies  held;  provided 
that  proxies  (or  delegates)  from  associations  or  granges  shall  be 
counted  in  the  number  necessary  for  a  quorum. 

Sec.  2.  At  all  meetings  of  the  board  of  directors  seven  shall  consti- 
tute a  quorum. 

IV.    Elections. 

Section  1.  There  shall  be  elected  at  each  annual  meeting  of  the  asso- 
ciation a  board  of  thirteen  directors.  It  shall  be  the  duty  of  the  board 
of  directors  to  elect  the  general  business  manager,  who  sliall  be  a 
patron  of  husbandry  in  good  standing ;  and  no  one  shall  be  employed 
in  the  business  of  the  association  without  their  advice  and  consent, 
and  they  shall  have  power  to  discharge  any  and  all  persons  employed 
by  them  under  their  direction.  All  vacancies  in  the  offices  of  the  asso- 
ciation shall  be  filled  by  the  president  until  the  next  regular  meeting 
of  the  board  of  directors.    All  elections  shall  be  by  ballot. 

Sec.  2.  The  board  of  directors  shall  elect  from  their  number  a  presi- 
dent, treasurer  and  secretary,  who  shall  serve  for  one  year  and  until 
their  successors  are  elected  and  qualified. 

Sec.  3.  The  board  of  directors  shall  be  chosen  from  the  shareholders 
of  the  Texas  Cooperative  Association,  Patrons  of  Husbandry,  and  dele- 
gates who  may  be  sent  by  the  cooperative  associations  or  granges  own- 
ing stock  in  the  association. 

v.    Duties  of  Officers. 

Section  1.  President.  It  shall  be  the  duty  of  the  president  to  preside 
at  all  meetings  of  the  association  and  board  of  directors,  and  liave 
general  supervision  of  the  association,  receive  and  carefully  preserve 
all  bonds  which  may  be  executed  to  the  association,  and  in  his  absence 
the  members  shall  elect  a  president  pro  tern. 

Sec.  2.  Treasurer.  The  treasurer  shall  be  responsible  for  all  money 
paid  him  on  account  of  the  association,  and  shall  only  pay  orders 
drawn  by  the  president,  countersigned  by  the  secretary,  with  the  seal 
attached.  He  shall  balance  his  cash  accounts  weekly,  and  furnish 
monthly  reports  to  the  president ;  also  make  a  report  to  the  directors 
at  their  annual  meetings. 

Sec.  3.  Secretary.  The  secretary  shall  attend  all  the  meetings  of 
the  association  and  directors;  summon  all  special  meetings  of  the 
board  of  directors,  keep  a  correct  record  thereof;  keep  account  of  the 
stock  taken  In  the  association,  and  deposit  with  the  treasurer  all 
money  received  by  him,  at  least  once  in  every  tliirty  days,  and  perform 
such  other  duties  as  may  be  assigned  him  by  the  board  of  directors. 

Sec.  4.  Board  of  Directors.  Tlie  board  of  directors  shall  in  all  things 
act  for  and  In  the  name  of  the  association,  and  all  acts  and  orders  of 
the  directors,  under  the  power  delegated  to  them,  shall  have  like  force 
and  effect  as  the  acts  of  the  association  at  a  regular  meeting  thereof. 
All  questions  shall  be  decided  by  a  majority  of  the  votes  present. 
The  directors  shall  designate  the  salaries  or  compensation  to  be 
allowed  the  officers  and  employes,  and  report  to  the  association  at 
each  annual  meeting  the  condition  of  the  association. 


OF  THE    TEXAS   COOPERATIVE   ASSOCIATION.        289 


Sec.  5.  The  general  business  manager  sliall  transact  the  business  of 
the  association  in  the  city  of  Galveston,  or  such  other  place  or  places 
as  may  be  selected  by  the  directors.  He  shall  appoint  the  clerks,  with 
the  advice  of  the  president  and  the  approval  of  the  board  of  directors. 
He  shall  make  monthly  statements  of  the  business  to  the  president 
and  to  the  board  of  directors  at  their  annual  meeting,  and  at  such 
other  times  as  they  may  require. 

Sec.  6.  It  shall  be  the  duty  of  the  secretary,  at  the  expiration  of 
sixty  days  after  each  annual  report  of  the  board  of  directors,  to  issue 
certificates  of  stock  for  all  uncalled  for  profits  not  otherwise  provided 
for,  to  the  amount  of  even  shares,  in  the  name  of  the  owner  thereof, 
and  send  the  same  to  him ;  also  to  issue  drafts  for  all  fractional  parts 
of  shares  remaining,  when  applied  for. 

VI.  Bonds. 

The  secretary,  treasurer  and  business  manager  shall  give  bonds  in 
such  sums  as  may  be  required  by  tlie  board  of  directors  for  the  faith- 
ful performance  of  tlieir  several  duties,  and  to  secure  the  payment  of 
all  money  and  other  property  coming  into  their  hands;  provided  that 
none  of  the  aforesaid  officers  shall  have  a  voice  in  determining  the 
amounts  of  their  bonds,  or  the  approval  of  the  same. 

VII.  Books. 

Section  1.  Regular  sets  of  books  shall  be  kept  under  the  supervision 
of  the  general  business  manager,  secretary  and  board  of  directors,  in 
which  sliall  be  kept  exact  records  of  all  business  done  with  members 
and  customers,  setting  forth  in  detail  tlie  dividends  due  each  share- 
holder on  stock,  and  of  patrons,  customers  of  this  association. 

Sec.  2.  Clerk-books  shall  be  furnished  each  member  of  this  associa- 
tion, in  which  shall  be  entered  the  number  of  shares  in  his  name,  the 
amount  of  business  transacted  with  the  association,  the  interest  and 
accumulation  on  stock,  the  dividends  on  purchases,  the  rate  of  divi- 
dends declared,  and  amount  withdrawn;  also  the  times  of  the  meet- 
ings of  the  association  and  board  of  directors- 

VIII.    Certificates  of  Stock. 

Certificates  of  stock  shall  be  issued  to  shareholders  after  the  follow- 
ing form  :  Incorporated  the  5th  day  of  July,  A.  D.,  1878.  Capital  Stock, 
one  hundred  thousand  dollars  (8100,000).    Shares,  five  dollars  ($5)  each. 

This  certifies  that of  the  County  of and  State  of  Texas,  and 

a  member  of  Grange  No.  — ,  is  the  owner  of  share  No.  —  in  the 

Texas  Cooperative  Association,  Patrons  of  Husbandry,  subject  to  the 
rules  of  the  association.  In  witness  whereof,  the  seal  of  the  associa- 
tion and  the  signatures  of  the  president  and  secretary  are  hereto 

affixed,  at  the ,  this day  oT 18—. 

,  President. 

,  Secretary, 

IX.    Seals. 
This  association  shall  have  a  seal. 

X.    Capital  Stock. 
Section  1.    The  capital  stock  of  this  association  shall  be  raised  by  the 
sale  of  certificates  of  stock,  in  shares  of  five  dollars  or  its  multiples. 

Sec.  2.  The  money  raised  from  sale  of  certificates  of  stock  shall  be 
employed  by  the  board  of  directors  in  accordance  with  Article  2  of 
Charter. 

19 


290  MODEL  RULES  AN^D  WORKING  BY-LAWS 


XI.    Profits  and  Divisions  of  Profits. 

Section  1.  The  profits  of  all  the  business  transacted  by  the  associa- 
tion, after  paying  all  expenses  of  the  management,  sliall  be  disposed 
of  in  the  following  manner  at  the  annual  meeting  of  the  board  of 
directors:  First,  shareholders  shall  be  allowed  ten  per  cent  interest 
per  annum  on  paid  up  stock;  secondly,  a  jwrtion  may  be  set  apart,  at 
the  discretion  of  the  board  of  directors  and  by  consent  of  the  associa- 
tion, to  increase  the  capital. 

Sec.  2.  After  making  provisions  in  the  manner  above  stated,  tlie 
remaining  net  profits  shall  be  divided  pro  rata  among  the  stockholders 
and  patrons,  based  upon  the  profits  derived  from  the  business  fur- 
nished; shareholders  receiving  full  dividends;  patrons  not  sharehold- 
ers, half  dividends. 

Sec.  3.  The  profits  arising  from  the  business  furnished  by  non  pa- 
trons, and  one-half  of  the  profits  on  tliat  of  patrons  of  husbandry  who 
are  not  shareholders,  shall  constitute  and  be  known  as  the  accumula- 
tive fund,  and  shall  be  divided  annually  pro  rata  among  the  stockhold- 
ers, based  upon  the  number  of  paid-up  shares;  and  stock  shall  be 
Issued  for  the  same. 

xn.   Complaints. 

All  complaints  shall  be  made  to  the  general  business  manager,  or  to 
any  member  of  the  board  of  directors,  in  writing,  signed  by  some  mem- 
bers of  the  association.  Tlie  directors  shall  make  such  investigations 
and  decisions  thereon  as  they  may  deem  proper,  subject  to  an  appeal 
to  the  next  regular  meeting  of  the  association,  whose  decision  shall  be 
final.  All  complaints  and  decisions  sliall  be  entered  in  a  book  kept 
for  that  purpose. 

Xin.    Amendments. 

These  by-laws  may  be  altered  or  amended  at  any  annual  meeting  of 
the  association  by  a  majority  vote  of  the  stockholders  present. 


BY-LAWS    OF    THE    FRUIT    GROWERS*    UNION,    HAMMON- 
TON,    N.  J. 

Article  I. 
The  name  of  this  organization  shall  be  "The  Fruit  Growers'  Union 
and  Cooperative  Society  (Limited)." 

Article  n. 
The  officers  of  the  society  shall  consist  of  a  president  and  eight 
directors,  to  be  elected  from  the  members  annually  by  ballot;  and  at 
the  same  time  there  shall  be  elected  an  auditing  committee  of  three ; 
a  plurality  of  votes  to  constitute  an  election.  All  vacancies  shall  be 
filled  by  the  board  of  directors. 

ARTICLE  III. 
Section  1.    Annual  meetings  of  the  society  for  the  election  of  officers 
and  the  transaction  of  other  business  shall  be  held  on  the  last  Satur- 
day in  January,  at  two  (2)  o'clock  in  the  afternoon.    Place  to  be  desig- 
nated in  the  call. 


OF  THE   FRUIT   GROWERS'   TTIflON".  291 


Sec.  2.  Special  meetings  of  the  society  shall  be  called  by  the  presi- 
dent wlienever  a  majority  of  the  directors  shall  deem  it  expedient,  or 
wlienever  ten  or  more  members  request  the  same  in  writing.  The 
notice  of  said  meeting  and  the  object  in  calling  it  shall  be  printed  and 
mailed  to  each  member  in  due  season.  A  quorum  for  the  transaction 
of  any  business  at  any  regular  or  special  meeting  shall  consist  of  not 
less  than  twenty  (20)  members. 

Sec.  3.  The  president  may  call  meetings  of  the  board  of  directors 
from  time  to  time  for  consultation,  and  shall  call  meetings  when  re- 
quested by  three  directors. 

Article  IV. 
Such  real  and  personal  estate  as  the  purposes  of  the  society  require 
may  be  acquired  and  held,  but  at  no  time  shall  the  value  of  such  estate 
exceed  the  sum  of  twenty-five  thousand   dollars  ($25,000);   provided 
that  this  limitation  shall  not  apply  to  merchandise  kept  for  sale. 

Article  V. 

Shares  may  be  transfeiTed  on  approval  of  the  board  of  directors; 
but  where  approval  is  not  given,  they  shall  purchase  such  shares  at  a 
price  not  exceeding  their  par  value,  but  no  share  shall  be  transferred 
if  the  liolder  is  Indebted  to  the  society. 

Article  VI. 

Members  may  withdraw  at  any  time  by  giving  notice  in  writing  to 
the  secretary,  and  paying  all  Indebtedness  to  the  society. 
Article  VII. 

Whenever  in  the  opinion  of  the  directors  it  is  desirable  to  invest  any 
portion  of  the  capital  of  the  society  in  a  wholesale  cooperative  store 
they  may  report  the  same  to  a  regular  or  special  meeting  of  the  society, 
and  the  recommendation  shall  be  determined  by  a  majority  vote  of 
the  members  present. 

Article  VIII. 

The  board  of  directors  may  determine  from  time  to  time  what  credit 
may  be  given  to  the  members,  and  a  monthly  report  shall  be  made  to 
the  board  from  the  person  in  charge  of  the  store  showing  the  amount 
of  busines  done,  and  the  amount  of  indebtedness ;  and  under  no  cir- 
cumstances shall  credit  be  given  to  any  member  wlio  is  one  year  in 
arrears  to  the  society.  The  board  shall  use  every  effort  to  collect  its 
bills,  and  to  Insure  the  safety  of  the  society  in  the  execution  of  this 
part  of  its  business. 

Article  IX. 

The  auditing  committee  shall  examine  all  accounts  of  the  society 
and  shall  make  a  detailed  report  of  its  financial  condition,  prior  to  the 
annual  meeting,  which  shall  be  printed  and  mailed  by  the  secretary 
to  the  members;  and  they  shall  receive  such  compensation  for  sa'd 
work  as  the  directors  may  consider  just. 
Article  X. 

Section  1.  The  mercantile  and  shipping  departments  shall  be  sepa- 
rate and  distinct,  and  the  expenses  of  each  department  shall  be  taken 
from  its  own  resources. 

Sec.  2.  Six  per  cent  annually  shall  be  paid  on  all  shares  of  stock  at 
the  beginning  of  each  financial  year.  A  sum  equal  to  five  per  cent  of 
tlie  net  profits  shall  be  annually  set  aside  as  a  contingent  fund  until 


293  MODEL  BULES  AND  WOEKINO  BY-LAWS 


the  tuuount  reaches  thirty  per  cent  of  the  said  stock.  The  amount 
thus  xttquired  shall  be  taken  from  the  profits  of  the  two  departments 
in  such  proportion  as  the  directors  may  deem  just.  The  remaining 
profits,  if  any,  sliall  be  divided  as  follows : 

First,  On  shipments  in  proportion  to  gross  sales,  which  shall  be  com- 
puted from  members'  bills ;  and  for  this  purpose  all  bills  must  be  filed 
in  the  ofiftce  of  the  secretary  on  or  before  December  1st. 

Second,  On  merchandise,  in  proportion  to  amounts  purchased,  except 
that  non-members  shall  receive  half  the  rates  of  members. 

Sec.  3.  Dividends  shall  be  declared  annually  in  both  departments, 
and  profits  from  shipments  may  be  paid  In  stock  or  in  cash,  and  profits 
from  sales  of  merchandise  may  be  paid  in  goods  or  in  cash,  as  the 
board  of  directors  may  determine ;  but  no  part  of  any  dividend  shall 
be  paid  to  a  person  indebted  to  the  society. 
Article  XI. 

The  society  shall  possess  a  seal  of  the  same  device  as  the  one  in  use 
prior  to  reorganization,  which  shall  be  in  the  custody  of  the  secretary, 
and  shall  be  stamped  upon  such  papers  as  are  usually  sealed  or  that 
the  law  may  require. 

Akticle  XII. 

The  board  of  directors  shall  elect  one  of  their  number  treasurer,  also 
a  secretary,  agent,  and  such  other  employes  as  the  society  may  need 
for  the  transaction  of  its  business,  and  shall  fix  the  compensation  of 
all  its  employes.  They  shall  also  provide  for  the  issue  oi.  certificates 
of  stock,  which  certificates  shall  be  signed  by  president  and  treasurer. 
Article  XIII. 

The  treasurer  shall  receive  the  moneys  of  the  society  from  the  secre- 
tary; shall  disburse  the  same  in  accordance  with  the  direction  of  the 
board  of  directors,  only  upon  orders  signed  by  the  president  and  coun- 
tersigned by  the  secretary.  He  shall  keep  a  shipping  and  trading 
account,  and  an  account  of  all  receipts  and  disbursements,  and  make 
a  written  report  to  the  board  of  directors,  when  required  by  them,  of 
the  financial  condition  of  the  society,  and  shall  pay  over  to  his  suc- 
cessor in  ofiBce  all  moneys  and  deliver  over  all  books  and  papers  be- 
longing to  the  society. 

Article  XIV. 

Each  member  shall  have  but  one  vote,  which  must  be  cast  in  person. 
Article  XV. 

Section  1.  The  society  will  assume  the  position  of  agent  for  the 
various  commission  merchants  with  whom  its  members  do  business; 
and  for  this  service  said  merchants  shall  be  required  to  pay  into  the 
treasury  of  the  society  such  commission  as  shall  be  fixed  by  the  board 
of  directors  on  all  sales  made  for  its  members. 

Sec.  2.  A  book,  to  be  known  as  the  Merchants'  Book,  shall  be  opened 
by  the  secretary  of  this  society,  in  which  shall  be  recorded  the  names 
of  all  merchants  complying  with  this  requirement.  Such  list  to  be 
lieaded  by  the  name  of  the  town  or  city  in  which  they  are  located. 

Sec.  3.  Upon  the  oi>ening  of  a  new  market,  careful  inquiry  shall  be 
made  concerning  the  standing  of  the  merchants  of  such  locality,  and 
report  the  names  of  such  as  are  reliable  and  subscribe  to  our  condi- 
tions, which  names  shall  then  be  added  to  the  mercliants'  book;  and  a 
list  of  such  merchants  shall  be  forwarded  by  the  directors  to  every 
member  of  the  society  on  or  before  the  first  of  May,  annually. 


OF  THE  FRUIT    GROWERS'   UKION.  293 

Article  xvi. 

At  the  request  of  members,  new  commission  houses  may  be  entered 
on  the  merchants'  book  by  order  of  the  directors ;  provided,  said  mem- 
bers furnish  satisfactory  evidence  of  the  financial  standing  of  such 
houses. 

Article  XVII. 

Members  shipping  to  commission  liouses  not  entered  our  books, 
except  in  cities  where  we  do  no  business,  sliall  forfeit  tlie  sum  of  one 
dollar  for  each  offense,  which  amount  shall  be  taken  from  such  offend- 
int(  members'  dividends.  They  shall  also  forfeit  all  claims  on  the  soci- 
ety to  look  after  their  losses  for  that  year. 
Article  XVIII. 

These  by-laws  may  be  altered  or  amended  at  any  regiilar  meeting,  or 
at  any  special  meeting  called  for  that  purpose,  by  a  two-thirds  vote  of 
those  present  at  such  meeting. 


BY-LAWS  OF  THE  CALIFORNIA  FRUIT  UNION. 

Trustees. 
Section  1.  The  powers  and  authorities  necessary  for  the  full  man- 
agement and  care  of  the  affairs  of  tlie  corporation  shall  be  vested  in  a 
board  of  trustees,  nine  in  number,  llnee  of  whom  may  be  non-produc- 
ers, engaged  in  buying  and  sliippiiig  fruit,  who  shall  be  elected  by  the 
stockholders  annually,  on  the  third  Wednesday  in  January  of  each 
year.  No  person  shall  be  eligible  for  the  office  of  trustee  who  shall  not 
hold,  at  the  time  of  his  election,  five  shares  of  the  stock  of  the  com- 
pany. And  the  office  of  any  trustee  shall  become  vacant  whenever  he 
shall  cease  to  hold  said  minimum  quantity  of  stock,  associated  with 
equivalent  producing  acreage.  At  the  first  meeting  after  their  elec- 
tion, whlclj  must  be  held  within  ten  days  thereof,  the  board  of  trustees 
shall  organize  by  the  election  of  one  of  their  number  as  president,  and 
a  second  as  vice-president,  for  tholr  term.  Tliey  sliall  also  elect  a 
treasurer,  who  may  or  may  not  be  of  their  number,  and  may  be  a  cor- 
poration; and  asecretarj',  who  need  not  necessarily  be  a  stockholder 
They  sli.-rfl  also  appoint  a  general  manager,  who  may  or  may  not  be 
one  of  their  number,  to  hold  office  rlnriiig  the  pleasure  of  the  board, 
and  to  perform  such  duties  as  tlie  board  may,  by  vote,  prescribe.  They 
shall  fix  the  salaries  and  amount  of  bonds  of  the  president,  vice-presi- 
dent, secretary,  treasurer,  and  general  manager,  and  see  to  the  jiroper 
tiling  of  such  bonds,  and  their  maintenance  In  unimpaired  suflicieiiey 
of  security.  They  may  fix  their  own  times  and  places  of  meeting,  for 
the  transaction  of  the  business  of  the  corporathm,  and  may  adopt  such 
rules  and  regulations  for  their  government  and  for  the  managciiKMil  of 
the  affairs  of  the  cori>oratlon,  as  they  may  deem  desirabh^.  and  not 
inconsistent  with  the  provisions  of  these  laws.  Trustees  shall  receive 
no  compensation  for  their  services  to  the  corporation  as  such,  hut  shrill 
be  paid  their  actual  travelinc  expenses  In  attendance  upon  any  meet- 
ing of  the  board  of  trustees. 


294  MODEL  BULES  AND  WORKING  BY-LAWS 

The  President. 

Sec.  2.  The  president  shall  be  the  executive  officer  of  the  corpora- 
tion, and  shall  preside  at  all  meetings  of  the  stockholders  and  of  the 
board  of  trustees;  shall  sign,  witli  the  secretary,  all  certificates  of 
stock,  deeds,  contracts,  leases ;  and  generally  exercise  all  other  authori- 
ties and  perform  all  other  duties  connected  with  the  affairs  of  the  cor- 
poration, requisite  and  appropriate  to  such  office.  He  shall  receive 
such  compensation  as  may  be  fixed  by  the  board  of  trustees,  for  his 
services  to  the  corporation  as  president,  and  shall  be  allowed  actual 
traveling  expenses,  in  attendance  upon  any  business  appertaining  to 
the  affairs  of  the  corporation. 

The  Vice-President. 

Sec.  3.  The  vice-president  shall,  in  the  absence  or  other  incapacity 
of  the  president,  perform  his  duties  and  exercise  his  powers,  being 
subject  to  the  same  rules  as  to  compensation  and  expenses,  when  act- 
ing as  such  president. 

Meetings. 

Sec.  4.  Special  Meetings.— THie  president,  or,  in  his  absence,  the  vice- 
president,  shall  call  special  meetings  of  the  stockholders  of  the  corpo- 
ration, or  the  board  of  trustees,  whenever,  in  his  judgment,  the  inter- 
ests of  the  corporation  require,  or  at  any  time  on  the  written  request 
of  ten  stockholders  of  the  corporation;  causing,  in  the  case  of  the 
stockholders,  two  weeks'  notice  of  the  meeting  and  its  objects  to  be 
published  in  some  newspaper  in  the  county  in  which  the  corporation's 
principal  business  office  is  situated;  and  in  the  case  of  the  board  of 
trustees,  at  least  three  days'  notice  to  each  member  of  the  board,  per- 
sonally or  in  writing,  addressed  to  his  last  known  place  of  abode;  pro- 
vided, that  when  all  the  stockholders  of  the  corporation,  or  all  the 
members  of  the  board  of  trustees,  shall  be  present  at  any  meeting, 
however  convened,  and  shall  sign  a  written  consent  thereto  in  the 
minutes  thereof,  business  of  any  nature  may  be  transacted  thereat,  in 
like  manner  and  with  like  effect  as  if  such  meetings  were  formally 
called.  At  each  annual  meeting  of  the  stockholders,  to  be  held  as 
before  provided,  on  the  third  Wednesday  of  each  year,  the  president 
shall  submit  a  report  of  the  operations  of  the  corporation  for  the  year 
preceding,  accompanied  by  detailed  reports  from  the  general  manager, 
secretary  and  treasurer. 

Stock. 

Sec.  5.  Subdivision  1.— The  capital  stock  of  this  corporation  shall  be 
evidenced  by  certificates,  duly  signed  by  the  president  and  secretary, 
consisting  of  two  hundred  and  fifty  thousand  (250,000)  shares,  of  the  par 
value  of  one  dollar  (SI)  per  share ;  and  certificates  may  be  issued  prior 
to  the  full  payment  of  the  par  value,  subject  to  the  provisions  of  this 
by-law.  Each  subscriber  must,  upon  the  issuance  of  his  certificate, 
pay  to  the  secretary  twenty-five  per  cent  of  the  par  value,  and  there- 
after, on  the  call  of  the  board  of  trustees,  must  pay  twenty-five  per 
cent  of  such  par  value  until  the  whole  is  fully  paid. 

Subdivision  2.— No  person  shall  be  admitted  as  a  stockholder  in  this 
corporation,  either  by  original  subscription  or  by  purchase,  transfer  or 
otherwise,  nor  shall  any  certificate  of  stock  be  issued  to  any  person, 
unless  such  person  is  the  owner  of  either  one  (1)  acre  of  orchard,  or  one 
(1)  acre  of  vineyard  or  shipping  grapes,  or  one  (1)  acre  of  small  fruits 


OF  THE  CALIFORNIA  FRUIT   UNION.  295 

or  vegetables,  suitable  for  shipping  beyond  the  limits  of  the  State  of 
California,  for  each  share  of  stock  which  he  claims  to  have  issued  or 
transferred  to  liim.  Any  non-producer  engaged  in  buying  and  shipping 
fruit  may  become  a  member  of  the  union  by  taking  two  hundred  (200) 
sliares. 

Subdivision  3. — The  secretary  may  require  from  any  person  claiming 
the  issuance  or  transfer  of  a  certificate  of  stock,  an  affidavit,  showing 
that  lie  is  qualified  to  own  the  same  under  the  provisions  of  Subdivis- 
ion 2  hereof. 

Subdivision  4.— When  any  person  to  whom  stock  has  been  issued,  in 
accordance  with  the  provisions  of  Subdivision  2  hereof,  shall  cease  to 
possess  the  qualifications  required  by  said  Subdivision  2,  he  shall,  ipso 
facto,  to  the  extent  to  which  he  shall  so  have  ceased  to  possess  such 
qualifications,  cease  to  be  or  to  have  any  rights  as  a  stockholder  of 
this  coi-poration,  except  that  he  may  transfer  his  stock  to  any  person 
qualified  to  be  admitted  as  a  stockholder,  or  may  surrender  the  same 
to  the  corporation,  in  accordance  with  the  provisions  hereof:  pro- 
vided, however,  that  the  representative  of  the  estate  of  a  deceased, 
insolvent  or  bankrupt  stockholder  may  exercise  ownership  of  the 
stock  of  such  deceased,  insolvent  or  bankrupt  stockholder,  so  long  as 
his  estate  shall  continua  to  own  the  orcliard,  vineyard  or  vegetable 
land  necessary  to  qualify  the  original  owner  to  hold  such  stock. 

Subdivision  5.— When  any  stockholder  shall  cease  to  be  qualified  as 
such,  he  may  deJiver  up  to  the  secretary  his  certificate  of  stock,  which 
shall  thereupon  be  canceled,  and  he  shall  be  repaid  by  the  corporation 
the  amount  he  shall  have  paid  thereon. 

Subdivision  6.— This  by-law  shall  be  printed  in  full  on  the  back  of 
each  certificate. 

General,  manager. 

Sec.  6.  The  general  manager  shall,  by  authorization  of  the  board  of 
trustees,  take  general  supervision  of  the  business  of  the  corporation, 
in  preparing  for  the  forwarding  to  markets  of  sale  and  the  selling  in 
such  markets,  all  the  fruit  and  fruit  products  and  other  produce  under 
tlie  control  of  the  corporation.  He  shall,  by  and  with  the  assistance  of 
tlie  secretary,  district  the  whole  State  into  produce  districts,  grotiped 
territorially  with  reference  to  the  natural  common  shipping  point; 
sliall  cause  to  be  prepared  reliable  returns  of  the  number  and  variety 
of  trees  and  vines  in  each  said  district,  their  estimated  yield  each 
sliippiiip  season,  to  the  end  that  an  approximately  reliable  calculation 
may  be  made  in  advance  of  each  season's  shipping  operations,  of  the 
quantities  and  varieties  for  which  markets  must  be  found.  He  shall 
collect,  (litest  and  tabulate  all  this  Information,  so  that  it  may  be  sea- 
sonably an<l  periodically  placed  before  the  trustees  of  this  corporation. 
In  all  arrangements  for  shipping  and  marketing,  he  shall  be  clothed 
with  suoli  powers  and  authority  by  the  board  of  trustees  as  shall  be 
b<!st  calculated  to  make  his  dispositions  effective,  and  result  benefi- 
cially to  the  Interests  of  the  stockholders  of  this  corporation. 
Secretary. 

Sec.  7.  The  secretary  shall  be  the  custodian  of  the  records  of  the 
corporation.  He  shall  keep  ftill  minutes  of  the  proceedings  at  all 
meetings  of  the  stockholders  and  of  the  board  of  tnistees.  He  shall* 
jointly  with  the  president,  sign  all  certificates  of  stock,  always  strictly 


296  MODEL  RULES  AND  WOBKING  BY-LA.WS 

In  accordance  with  Section  6  hereof,  regulating  stock  issue  and  tranp- 
fers,  keeping  proper  books  of  record  thereof;  shall  make  in  due  fonn, 
In  accordance  also  with  Section  5  hereof,  all  transfers  of  stock,  wlien- 
ever  required,  carefully  canceling  all  retired  stock  certificates;  sliall 
keep  an  accurate  account  of  the  stockholders  of  the  corporation ;  sliall 
countersign  all  contracts,  deeds  and  leases  signed  by  the  president 
under  the  direction  of  the  board  of  trustees,  keeping  an  accurate 
record  of  the  same.  He  shall  collect  of  the  subscribers  to  stock  in  tliis 
corporation  the  amount  of  their  contribution  to  its  capital,  and  pay 
the  same  over  to  the  treasurer  of  the  corporation.  He  shall  keep 
accurate  accounts  of  the  receipts  and  expenditures  of  the  corporation, 
full  and  detailed  books  of  account  with  the  various  individual  sub- 
scribers consigning  produce  to  the  corporation  for  sale,  rendering 
proper  statements  thereof ;  also  full  and  detailed  accounts  of  all  sliip- 
ments  by  the  corporation.  He  shall,  in  connection  with  the  general 
manager,  as  provided  in  Section  6  hereof,  cause  to  be  prepared  and 
periodically  issued  to  the  trustees,  for  the  exclusive  benefit  of  the  cor- 
poration, reports  and  estimates  of  tlie  probable  fruit  yield  of  each  sea- 
son, and  report  on  Eastern  consumption  markets;  in  fact,  establishing 
and  maintaining,  in  the  highest  possible  efficiency,  a  department  of 
statistics,  where  everything  calculated  to  promote  the  interests  of  the 
stockholders  of  this  corporation  may  be  carefully  collected,  digested, 
and  periodically  published  to  the  members  of  this  corporation.  He 
shall  Issue  the  proper  notices  of  all  meetings  of  the  stockholders  and 
board  of  trustees.  He  shall,  in  all  other  respects,  perform  such  other 
duties  as  may  be  appropriate  to  the  ofllce  of  secretary,  and  be  required 
by  the  board  of  trustees. 

Treasubeb. 

Sec.  8.  The  treasurer  shall  have  charge  of  the  finances  of  the  corpo- 
ration ;  shall  receive  from  the  secretary,  as  hereinbefore  provided  \n 
Section  7,  all  avails  from  disposal  of  stock  and  proceeds  from  assess- 
ments of  stock  of  the  corporation,  depositing  the  same  in  bank  or  de- 
pository, to  be  selected  by  the  board  of  trustees,  to  the  credit  of  the 
corporation,  thence  to  be  drawn  only  on  the  order  of  the  president  and 
secretary.  He  shall  collect  and  receive  all  moneys  belonging  to  the 
corporation,  from  whatsoever  source  derived.  He  shall  furnish  a  good 
and  sufficient  bond  for  the  safe  custody  of  the  same  on  the  call  of,  and 
to  the  satisfaction  of,  the  board  of  trustees.  He  shall  keep  proper 
books  of  account,  at  all  times  open  to  the  inspection  of  stockholders, 
and  at  each  annual  meeting  of  the  stockholders  he  shall  submit  a 
report,  accompanied  by  proper  vouchers,  of  the  corporation  for  the 
preceding  year.  He  shall  also  make  such  partial  reports  as  may  be 
called  for  by  the  board  of  trustees  at  any  meetings  of  the  board,  or  of 
stoi-kholders,  other  than  the  annual  meetings.  He  shall  make  all  nec- 
essary disbursements  for  the  current  transaction  of  the  affairs  of  the 
corporation,  in  accordance  with  whatever  system  the  board  of  trustees 
may  direct. 

Quorum,  votes.  Proxies. 

Sec.  9.  Stockholders  representing  a  majority  of  the  outstanding 
stock  of  the  corporation,  and  a  majority  of  the  board  of  trustees,  re- 
spectively, shall  constitute  a  quorum  for  the  transaction  of  business  at 
all  meetings  of  their  several  bodies.    All  questions  at  meetings  of  the 


OF  THE  CALIFORN^IA  FRUIT  UNIOK.  297 


board  of  trustees  shall  be  decided  by  the  vote  of  a  majority  of  the 
members  present;  all  questions  before  meetings  of  the  stockholders 
shall  be  decided  by  voting  of  shares,  one  vote  to  each  share  of  stock 
actually  owned  by  an  owner  of  an  equivalent  acreage  of  orchard,  vege- 
tables, small  fruits  or  vineyard  of  grapes,  and  no  stock  shall  be  recog- 
nized as  entitled  to  a  vote,  unless  so  voted  by  an  owner  of  such  equiv- 
alent acreage,  as  before  mentioned.  Voting  by  proxy  shall  only  be 
allowed  when  the  proxy  is  of  his  own  right  an  actual  owner  of  stock 
in  the  corporation,  with  an  equivalent  ownership  of  orchard  and  vine- 
yard. The  majority  of  votes  cast  in  accordace  with  the  foregoing 
shall  decide  all  questions  at  meetings  of  the  stockholders. 
Guarantee,  Shipments,  Sales. 
Sec.  10.  All  stockholders  shipping  through  the  Union  shall  be  re- 
quired to  file  a  good  and  sufficient  guarantee  with  the  secretary  of  the 
Union,  to  indemnify  the  said  Union  against  all  losses  from  non-pay- 
ment of  freights,  or  for  any  sales  of  fruit  or  vegetables  not  covering 
exi)enses  on  his  or  their  shipments.  No  fruit  or  vegetables  shall  be 
shipped  through  the  Union,  except  the  product  of  acreage  duly  repre- 
sented by  ownership  of  stock  in  the  Union,  upon  which  stock  all  calls 
or  assessments  shall  have  been  paid.  The  board  of  trustees  are  au- 
thorized to  sell  fruit  at  auction,  when  in  their  judgment  they  think  it 
best  to  do  so. 

Division  of  Profits. 

Sec.  11.  In  the  division  of  the  net  profits  of  the  Union  there  shall  be 
allotted  to  the  stockholders  of  the  Union  dividends  of  not  exceeding 
six  per  cent  per  annum  on  their  stock;  next,  there  shall  be  allotted 
two  per  cent  to  a  reserve  fund  of  the  Union;  and  all  the  remaining 
profits  shall  be  divided  among  the  stockholders  of  the  Union,  who  con- 
sign their  produce  through  said  Union,  in  proportion  to  the  amount,  in 
selling  value,  of  their  produce  so  consigned  by  them ;  the  intent  thereof 
being  to  make  the  Union  essentially  a  "  cooperation  "  for  the  profit  of 
fruit-growers  supporting  it. 

Local  Corporations. 

Sec.  12.  Local  corporations,  associations,  co8perative  unions,  or  other 
bodies,  corporative  or  otherwise,  which  are  already  organized,  or 
which  may  be  hereafter  organized,  which  represent  and  which  are 
duly  empowered  to  act  for  a  community,  or  for  the  fruit  producers  of  a 
special  locality  or  localities  acting  in  unison,  may  subscribe  to  the 
capital  stock  of  this  corporation  as  an  organization,  to  the  extent  of  a 
number  of  shares  equivalent  to  the  acreage  of  the  individual  owners 
or  producers  composing  such  organization,  and  such  stock  subscrip- 
tions and  the  issue  thereof  shall  be  subject  to  all  the  rules  and  regula- 
tions for  stock  issue,  transfer,  voting,  etc.,  hereinbefore  prescribed  for 
Individual  stockholders. 

Surrender  of  Stock. 

Sec.  13.  Any  stockholder,  while  still  qualified  as  such,  may  at  any 
time  surrender  and  deliver  to  the  secretary  his  certificate  of  stock  for 
cancellation,  and  the  same  shall  thereupon  be  cancelled,  provided  it  is 
fully  paid,  or  he  then  pays  it  up  fully.  From  the  time  of  such  surren- 
der of  such  stock  he  shall  no  longer  be  a  stockholder  In  said  corpora- 
tion, and  by  such  surrender  he  shall  forfeit  whatever  be  may  have 
paid  on  such  stock. 


298  MODEL  BULES  AND  WORKIKG  BY-LAWS 


Limitation  of  Debts. 
Sec.  14.    No  debts  shall  be  incurred  for  this  Union,  by  Its  officers, 
exceeding  the  aggregate  amount  of  ten  thousand  dollars  (|;10,000)  at 
any  one  time,  except  for  freights  on  produce  handled  by  or  through 
the  Union. 

Amendment  of  By-Laws. 
Sec.  15.  These  by-laws  may  be  amended  without  notice,  by  a  vote  of 
a  majority  of  the  subscribed  stock,  upon  which  at  least  twenty-five 
per  cent  of  the  par  value  shall  have  been  paid  in,  at  the  first  annual 
meeting  of  stockholders ;  thereafter  they  may  be  amended  by  a  vote 
of  two-thirds  (§)  of  such  subscribed  stock,  upon  which  all  calls  shall 
have  been  paid  in,  at  any  regular  or  called  meeting,  provided  that  due 
notice  of  such  amendment  shall  have  been  given  at  a  previous  meet- 
ing, or  a  notice  through  the  mail,  by  the  secretary,  at  least  ten  (10) 
days  prior  to  date  of  meeting,  shall  have  been  addressed  to  each  stock- 
holder of  the  corporation  at  his  last  known  residence. 


KANSAS  ALLIANCE  EXCHANGE  COMPANY. 
Constitution. 

1.  The  name  of  this  corporation  shall  be  The  Kansas  Alliance 
Exchange  Company. 

2.  The  purposes  for  which  this  corporation  is  organized  are :  To  con- 
duct a  general  mercantile  business;  to  act  as  agent  for  the  purchase 
and  sale  of  all  kinds  of  farm  and  orchard  products,  and  general  for- 
warding agents  for  all  kinds  of  commodities;  to  erect,  manage  and 
opeT&te  warehouses,  stock  yards,  grain  elevators,  packing  establish- 
ments, and  all  such  other  enterprises  as  may  be  found  necessary  or 
advisable  to  profit  or  betterment. 

3.  This  corporation  shall  have  the  power,  by  and  under  its  corporate 
name,  to  enjoy  the  following  rights  and  privileges,  to  wit :  It  shall  be 
capable  in  law  to  purchase,  receive  and  hold  and  enjoy  lands,  goods 
and  chattels,  of  any  kind  or  effect  whatsoever,  the  same  to  grant,  sell 
and  dispose  of,  sue  and  be  sued,  plead  and  be  impleaded,  contract  and 
be  contracted  with,  to  make  a  common  seal,  to  alter  or  break  the  same, 
to  establish  and  put  into  execution  by-laws  governing  the  corporation, 
and  to  do  a  printing  and  publishing  business. 

4.  The  capital  stock  of  this  corporation  shall  be  $500,000,  divided  into 
100,000  shares  of  $5  each,  and  business  shall  be  begun  as  soon  as  $10,000 
shall  be  subscribed  and  paid  in. 

6.  Subscriptions  for  shares  of  capital  stock  shall  be  made  by  sub- 
alliances,  and  by  individual  members  of  the  same,  and  shall  be 
accompanied  by  the  full  amount  of  the  stock  subscribed. 

6.  All  male  members  shall  subscribe  at  least  $1  to  the  sub-alliance 
or  individual  stock,  to  enable  them  to  enjoy  all  the  benefits  of  the 
Exchange :  Provided,  That  no  alliance  or  individual  shall  own  more 
than  fifty  shares  of  stock. 


OF  THE  KAKSAS  ALLIANCE  EXCHANGE.  299 


7.  Receipts  will  be  given  for  fractions  equal  to  one-fifth  of  a  share, 
but  representation  shall  only  be  allowed  to  full  shares. 

8.  Stock  shall  be  non-assessable  and  non-transferable,  except  to 
members  of  the  Fanners'  Alliance. 

9.  Holders  of  fractional  sliares  shall  be  entitled  tofullbeneflt'of  mem- 
bership in  the  association,  except  representation. 

10.  Each  sub-alliance  shall  be  entitled  to  one  trustee  stockholder, 
who  shall  be  elected  at  the  regular  election  of  ofilcers.  He  shall  repre- 
sent such  sub-alliance  in  the  meeting  of  the  trustee  stockholders,  from 
and  for  the  sub-alliances  in  that  county,  and  shall  be  entitled  to  as 
many  votes  as  he  represents  shares  of  stock. 

11.  Individual  stockholders  shall  be  entitled  to  one  vote  for  each 
share  of  stock  by  them  owned,  and  may  be  represented  in  person  or  by 
proxy  at  any  meeting  of  the  county  convention  of  trustee  stockholders. 

12.  The  sub-alliance  trustee  stockholders  shall  at  their  regular  annual 
meeting  elect  from  their  number  one  delegate  for  all  shares  of  stock 
owned  in  the  county,  who  shall  be  known  as  county  trustee  stockholder, 
and  shall  be  authorized  to  represent  the  stock  held  in  that  county  in 
the  State  meeting  of  trustee  stockholders  of  the  corporation,  and  shall 
be  entitled  to  as  many  votes  as  he  represents  shares  of  stock.  Each 
trustee  stockholder  shall  be  the  representative  of  the  Exchange  in  his 
alliance,  and  shall  give  bond  in  the  sum  of  $ for  the  faith- 
ful performance  of  duty. 

13.  The  regular  annual  meeting  of  the  sub-alliance  trustee  stock- 
holders shall  be  at  the  same  time  and  place  as  the  regular  quarterly 
meeting  of  the  county  alliance,  in  October  of  each  year. 

14.  The  regular  annual  meeting  of  the  county  trustee  stockholders 
shall  be  at  the  time  and  place  of  the  annual  meeting  of  the  Farmers' 
State  Alliance  of  Kansas. 

15.  The  county  trustee  stockholders  shall  elect  annually  a  board  of 
seven  directors  from  the  stockholders,  four  of  whom  shall  constitute  a 
quorum. 

16.  The  board  of  directors  shall  elect  from  their  number  a  president, 
vice-president,  secretary,  treasurer  and  an  executive  committee  of 
three.  They  may  employ  or  discharge  such  assistants  as  necessary, 
taking  sufficient  bonds  to  cover  all  responsibility  reposed.  Tliey  shall 
enact  suitable  laws  and  regulations,  subject  to  approval  by  the  next 
meeting  of  stockholders :  Provided,  All  such  by-laws  and  regulations 
shall  have  the  full  force  of  law  until  the  stockholders  shall  have 
refused  to  concur  therein. 

17.  Owing  to  the  fact  that  the  election  of  trustee  stockholders  can- 
not concur  until  next  June,  it  is  recommended  that  the  State  Alliance 
elect  a  board  of  directors,  to  serve  until  their  successors  are  elected 
and  qualified. 

By-Laws. 

1-  Tlie  office  and  place  or  places  of  business  of  this  corporation  shall 
be  fixed  by  the  board  of  directors. 

2.  The  board  of  directors  shall  have  entire  control  of  the  business 
affairs  of  this  corporation. 

3.  The  officers  of  the  board  of  directors  shall  consist  of  a  president, 
vice-president,  secretary,  treasurer  and  an  executive  committee  of 
three. 


300  MODEL  HULES   AND   WORKING   BY-LAWS 


4.  The  president  shall  preside  at  all  meetings  of  the  board  of 
directors,  at  the  annual  meeting  of  the  trustee  stockholders,  sign  all 
orders  for  the  payment  of  money,  and  perform  all  other  duties  required 
by  the  board  of  directors.  In  the  absence  or  disability  of  the-  president, 
the  vice-president  shall  perform  the  duties  of  the  president.  In  the 
absence  of  both  president  and  vice-president,  the  board  of  directors 
may  elect  a  president  pi-o  tern. 

6.  The  secretary  shall  keep  an  accurate  record  of  all  the  meetings  of 
the  board  of  directors.  ...nd  the  annual  meetings  of  tlie  county  trustee 
stoclcholders.  He  shall  keep  a  set  of  books,  in  wliich  he  shall  make  a 
record  of  all  the  business  transactions  and  accounts  of  the  corporation. 
He  shall  keep  a  list  of  stockholders,  and  the  number  of  sliares  held  by 
each;  call  all  meetings  ordered  by  the  president  of  the  board  of 
directors;  receive  all  moneys  paid  into  the  corporation,  receipt  there- 
for, and  pay  the  same  over  to  tlie  treasurer  and  take  his  receipt  there- 
for. He  shall  conduct  the  correspondence  relating  to  the  business  of 
the  corporation,  make  all  reports  required  by  the  board  of  directors 
and  keep  a  true  copy  of  the  same,  and  make  annual  report  at  tlie  close 
of  the  business  of  each  year,  setting  forth  clearly  the  condition  of  the 
business  of  the  corporation  as  represented  by  the  accounts  and  records 
in  his  office,  and  do  and  perform  such  otlier  duties  as  may  be  required 
of  him  by  the  board  of  directors.  He  shall  give  bond  in  double  the 
amount  of  money  likely  to  come  into  his  hands,  conditioned  upon  the 
faithful  discharge  of  tlie  duties  of  his  office.  He  shall  turn  over  to 
his  successor  all  books,  papers,  money  and  all  other  property  in  his 
possession  belonging  to  the  corporation. 

6.  The  treasurer  shall  receive  all  moneys  belonging  to  this  corpora- 
tion, and  receipt  for  the  same.  He  shall  pay  out  money  only  on  the 
order  of  the  president,  countersigned  by  the  secretary,  with  the  seal  of 
the  corporation  affixed.  He  shall  make  a  quarterly  report  to  the  board 
of  directors  of  all  moneys  received  and  disbursed  during  the  quarter, 
and  at  such  other  times  as  the  board  of  directors  may  require.  At  the 
annual  meeting  of  the  board  of  directors  he  shall  make  a  full  and 
complete  report  of  all  moneys  received  and  disbursed,  setting  forth 
the  financial  condition  of  the  corporation,  for  the  information  of  (he 
stockholders.  He  shall  give  a  good  and  sufficient  bond  in  sueli  sum  as  the 
board  of  directors  may  require,  conditioned  ujKm  tlie  faitliful  discharge 
of  the  duties  of  his  office,  and  turn  over  to  his  successor  all  moneys, 
books,  papers  and  property  in  his  hands  belonging  to  the  corporation. 

7.  The  board  of  directors  may  employ  an  agent,  or  agents,  who 
shall  conduct  the  business  as  directed  by  the  board,  and  shall  be  sub- 
ject to  its  control,  .so  far  as  the  moneys  and  interests  of  the  stock- 
holders are  concerned.  But  no  contract  shall  be  closed  by  the 
business  agent  for  goods  to  supply  prospective  orders  until  such  con- 
tract is  ratified  by  the  executive  committee.  He  shall  give  bond  in 
such  sum  as  the  board  of  directors  may  require,  conditioned  upon  the 
faithful  performance  of  the  duties  assigned  to  him. 

8.  The  board  of  directors  shall  designate  some  good  and  reliable 
bank  or  banks,  at  or  near  the  business  center  of  the  Exchange,  as  banks 
of  deposit  for  its  funds,  and  shall  require  a  bond  of  said  bank  or 
banks  for  the  safe  keeping  of  its  funds,  if  deemed  best.  And  all 
moneys  shall  be  deposited  therein  to  the  credit  of  the  board,  and  shall 
not  be  drawn  therefrom  except  on  the  order  of  the  president,  counter- 
signed by  the  secretary,  with  the  seal  affixed. 


OF  THE  KANSAS  ALLIANCE  EXCHANGE.  301 


9.  The  regular  meetings  of  the  board  of  directors  shall  be  on  the  first 
Tuesday  of  each  quarter,  commencing  October  1,  1889.  Special  meet- 
ings of  the  board  of  directors  may  be  held  at  any  time,  on  the  call  of 
the  president,  through  the  secretary. 

10.  The  bond  of  the  treasurer  shall  be  $50,000,  and  the  business  agent's 
bond  shall  be  $20,000.  These  bonds  may  be  increased  at  the  discretion 
of  the  board  of  directors. 

11.  The  compensation  of  the  officers  shall  be  fixed  by  the  board  of 
directors,  and  the  directors  shall  not  receive  to  exceed  $2  per  day  and 
actual  traveling  expenses,  when  engaged  in  the  business  of  the  corpo- 
ration, which  claim  shall  be  audited  by  the  executive  committee. 

12.  The  executive  committee  shall  have  a  general  supervision  of  the 
work  of  the  Exchange  company,  through  its  chairman ;  shall  confer 
with  the  business  agent  of  the  Exchange  on  matters  of  business  coming 
before  him  of  a  difficult  character;  shall  inquire  into  the  responsibility 
of  all  bondsmen  of  the  several  officers;  shall  audit  all  claims,  and  shall 
pass  upon  the  correctness  of  all  official  reports,  and  perform  such 
other  duties,  not  provided  for  in  the  by-laws,  which  demand  prompt 
and  efficient  action. 

13.  These  by-laws  may  be  altered  or  amended  at  any  session  of  the 
board  of  directors  by  a  vote  of  two-thirds  of  the  members  present. 


BY-LAWS  OF  THE  GBANGERS'  BANK  OF  CALIFOENIA. 

Article  1.  The  name  of  this  corporation  shall  be  "  GSANGERS'  Bank 
OF  California." 

Art.  2.  The  principal  place  of  business  shall  be  in  the  city  and 
county  of  San  Francisco,  and  State  of  California, 

Art.  3.  The  bank  shall  have  a  capital  stock  of  one  million  of  dollars, 
divided  into  ten  thousand  shares,  of  a  par  value  of  one  hundred 
dollars  each. 

Art.  4.  None  but  Patrons  of  Husbandry  or  corporations  composed 
exclusively  of  Patrons  of  Husbandry,  shall  be  permitted  to  subscribe 
to  the  capital  stock  of  the  bank,  and  such  persons  or  incorporations 
shall  not  be  permitted  to  subscribe  in  excess  of  five  hundred  shares. 

Art.  5.  Stockholders  of  this  bank  shall  be  such  persons  or  corpora- 
tions as  may  have  executed  or  shall  hereafter  execute  a  subscription 
to  the  capital  stock  in  form  such  as  the  board  of  directors  may  pre- 
scribe, and  shall  pay  to  the  cashier  ot  the  bank  all  called  assessments, 
or  any  person  to  whom  said  stock  has  been  duly  assigned. 

Art.  6.  The  powers  of  the  corporation  shall  be  vested  in  a  board  of 
eleven  directors,  who  shall  be  elected  by  the  stockholders  at  the 
annual  meeting,  and  shall  hold  their  office  for  the  term  of  one  year, 
and  until  their  successors  are  elected  and  qualified. 

Art.  7.  The  directors  shall  be  stockholders  of  the  corporation,  and 
Patrons  of  Husbandry,  residents  of  the  State  of  California,  and  citizens 
of  tlie  United  States,  and  shall  hold  at  least  five  shares  of  the  capital 
sto<!k. 

Art.  8.  The  majority  of  the  whole  number  of  directors  shall  consti- 
tute a  quorum  for  the  transaction  of  lousiness,  and  every  decision  of  a 


302  MODEL  RULES  AKD  WOBKING  BY-LAWS 

majority  of  the  persons  duly  assembled  as  a  board  (If  not  In  conflict 
with  these  by-laws)  shall  be  valid  as  a  corporate  act. 

Art.  9.  Regular  meetings  of  the  board  of  directors  shall  be  held  at 
the  office  of  the  corporation  at  least  once  in  every  two  months,  and  at 
such  other  times  as  the  board  of  directors  may  direct;  and  special 
meetings  of  the  board  of  directors  shall  be  held  at  the  same  place, 
upon  the  call  of  the  president;  and  it  shall  be  the  duty  of  the  president, 
vice-president,  or  cashier,  to  call  special  meetings  upon  request  of  five 
directors,  or  upon  request  of  stockholders  representing  one-quarter  of 
the  stock  issued.  Ko  notice  need  be  given  of  the  regular  meetings,  in 
addition  to  that  furnished  by  this  article ;  but  of  special  meetings,  the 
president  or  cashier  shall  cause  all  directors  residing  outside  of 
San  Francisco  to  be  notified  by  mail  or  telegraph,  mailing  the  same 
seven  days  prior  to  such  meeting,  and  all  directors  residing  and  being 
in  the  city  and  county  of  San  Francisco  and  any  others  to  whom  it  is 
practicable  to  give  such  personal  notice,  to  be  personally  notified. 

Art.  10.  Whenever  a  vacancy  shall  occur  in  the  office  of  any  director, 
by  death,  resignation,  or  other  cause,  the  board  of  directors  shall 
appoint  a  successor  for  his  unexpired  term.  Provided  that  if  more 
than  one  vacancy  shall  occur  in  the  board  in  any  year,  a  meeting  of 
the  stockholders  shall  be  called  by  the  board  of  directors  within 
thirty  days,  giving  at  least  twenty  days'  notice  of  such  meeting,  by 
advertising  the  same  in  some  newspaper  published  daily  in  the  city  of 
San  Francisco,  for  the  pui-pose  of  filling  such  vacancy  or  vacancies. 

Art.  11.  Whenever  a  director  shall  cease  to  be  a  stockholder,  his 
office  becomes  ipso  facto,  vacant;  such  vacancy  shall  be  filled  as  pro- 
vided in  Article  10. 

Art.  12.  The  board  of  directors  shall  elect  from  their  number  a 
president  and  vice-president  of  the  corporation,  who  shall  hold  their 
office  for  one  year. 

Art.  13.  Tlie  president  or  vice-president,  or  either  of  them,  may  be 
removed  from  office  at  any  time  on  the  vote  of  seven  directors  in  favor 
of  such  removal. 

Art.  14.  The  board  of  directors  shall  appoint  a  cashier,  an  attorney, 
and  such  other  officers,  agents,  clerks  or  servants  as  the  business  of  the 
bank  shall  require,  define  their  powers  and  prescribe  their  duties, 
subject  to  the  by-laws,  and  shall  fix  the  salaries  or  compensation  to  be 
paid  all  officers,  agents,  clerks,  or  servants  of  the  corporation. 

Art.  15.  The  president,  vice-president  and  cashier  shall  have  charge 
and  custody  of  the  funds,  property,  books,  papers  and  other  matters 
of  the  corporation,  under  such  rules,  regulations  and  restrictions  as  the 
board  of  directors  shall  prescribe  in  the  by-laws,  or  by  express  resolu- 
tion from  time  to  time  made  or  passed. 

Art.  16.  The  president,  vice-president  and  cashier  shall  have  the 
power  to  buy  and  sell  bills  of  exchange,  to  make  loans  under  such 
regulations  and  restrictions  as  may  be  fixed  by  resolutions  of  tlie 
board  of  directors,  to  keep  the  common  seal,  and  each  shall  have  the 
power  to  affix  the  same  to  all  papers,  instruments,  or  documents,  on 
behalf  of  the  corporation,  requiring  the  seal;  they  shall  each  have  the 
power  to  collect  all  moneys  due  the  corporation;  to  make,  execute  and 
deliver  all  receipts,  releases,  acquittances,  or  other  papers,  writings, 
documents  or  instruments  on  behalf  of  the  corporation,  proper 
or  necessary  in   the   ordinary  course  of  business  of  the  bank;  and 


OF  THE  GEAN^GEES'   BANK  OF  CALIFOENIA.         303 


generally  to  carry  on  the  business  of  the  corporation,  subject  to  the 
control  of  the  board  of  directors,  expressed  through  the  by-laws,  or 
such  express  resolutions  as  may  from  time  to  time  be  passed;  and  they 
shall  each  report  to  the  board  of  directors,  when  required,  each  and 
everytliing  by  them,  or  either  of  them,  transacted. 

Art.  17.  The  president  and  vice-president  shall  not  both  be  absent 
from  the  State  at  the  same  time,  and  in  case  of  the  absence  of  either 
from  the  banlc,  his  duties  and  powers  shall  devolve  upon  and  be  per- 
formed by  the  other;  and  each  to  be  eligible  to  such  office  shall  be  a 
stockholder  to  the  amount  of  Ave  shares. 

Art.  18.  It  shall  be  the  duty  of  the  president,  and  in  his  absence  ihe 
vice-president,  to  preside  at  all  meetings  of  the  board  of  directors,  and 
at  all  meetings  of  the  stockholders  of  the  corporation. 

Art.  19.  It  shall  be  the  duty  of  the  cashier  to  keep  or  cause  to  be 
kept,  such  books  as  the  business  of  the  bank  may  require,  under  the 
control  and  instructions  of  the  board  of  directors.  He  shall  attend 
personally  to  the  business  of  the  bank  at  such  hours  as  the  board  of 
directors  may  determine.  He  shall  also  be  required  to  give  bonds  for 
the  faithful  performance  of  his  duties,  in  an  amount  to  be  fixed  by  the 
board  of  directors. 

Art.  20.  The  board  of  directors  shall  appoint  from  their  number  a 
finance  committee  of  three,  whose  duties  shall  be  defined  by  resolution 
of  the  board  of  directors. 

Art.  21.  The  board  of  directors  shall  appoint  an  auditing  committee 
of  three  from  their  number,  whose  duty  it  shall  be  to  count  the  cash, 
and  examine  the  books,  vouchers,  documents,  papers  and  other  assets 
of  tlie  bank;  to  report  upon  the  same  to  the  stockholders  at  their 
annual  meetings  and  to  the  board  of  directors  from  time  to  time,  as 
they  may  direct. 

Art.  22.  The  annual  meeting  of  the  stockholders  for  the  election  of 
directors  shall  be  held  at  the  office  of  the  bank,  on  the  second  Tuesday 
of  January  of  each  year,  at  one  o'clock  p.  m. 

Art.  23.  The  call  for  the  annual  meeting  of  stockholders,  and  for  the 
annual  election  of  directors  shall  be  signed  by  the  president,  vice- 
president  or  cashier,  and  published  at  least  once  a  week  for  four 
consecutive  weeks  next  preceding  the  day  of  meeting,  in  at  least  three 
newspapers  of  general  circulation  throughout  the  State  If  from  any 
cause  no  quorum  shall  be  present,  the  meeting  may  adjourn  from  time 
to  time  without  further  notice. 

Art.  24.  Amended  Oct.  10,  1876;  annual  meeting.  Struck  out  entirely 
January  8, 1884;  annual  meeting. 

Art.  25.  The  board  of  directors  shall  have  the  power  to  regulate  from 
time  to  time,  the  rate  of  interest  to  be  charged  ujjon  loans  and 
allowed  upon  deposits. 

Art.  26.  All  transfers  of  stock  shall  be  subject  to  all  debts  and 
equities  In  favor  of  the  corporation  against  the  person  or  corporations 
making  such  transfer,  and  existing  or  arising  prior  to  the  regular 
transfer  thereof  upon  the  books  of  the  corporation;  and  no  transfer 
of  shares  shall  be  made  upon  the  books  of  the  corporation  until  all 
dues  and  demands  then^on,  due  to  the  corporation  from  the  party  or 
parties  representing  such  shares,  sliall  hiive  been  paid. 

Art.  27.  All  transfers  of  stock  shall  be  made  on  the  books  of  the 
corporation,  and  no  transfer  shall  be  binding  on  the  corporation  until 


304  MODEL  RULES  AND   WOBKING   BY-LAWS 

so  entered,  or  until  all  assessments  thereon  have  been  paid.  No  stock 
that  has  been  transfeiTed  on  the  books  of  the  corporation  within  thirty 
days  next  preceding  any  meeting  of  tlie  stockliolders,  shall  be  entitled 
to  representation  at  said  meeting. 

Art.  28.  Certificates  of  stock  shall  be  issued  to  the  original  stock- 
holders of  this  bank  to  the  number  of  shares  by  each  subscribed  in  the 
original  articles  of  association,  as  evidence  to  each  of  the  number  of 
shares  by  him  owned  in  the  capital  stock,  and  the  manner  of  trans- 
ferring shares  shall  be  by  endorsement  and  delivery  of  the  certificate 
tliereof,  such  endorsement  being  by  the  signature  of  the  proprietor,  or 
his  or  her  attorney,  or  legal  representative.  No  stock  shall  be  trans- 
ferred without  the  sunrender  of  the  certificate,  and  upon  such  surren- 
der the  word  "cancelled"  shall  be  written  across  the  face  of  the 
certificate  by  the  cashier,  and  the  signature  of  the  offtcers  shall  be 
erased,  and  such  certificate  so  cancelled  shall  be  preserved  by  pastliig 
the  same  to  the  stub  from  which  it  was  torn  in  the  certificate  book. 
The  transfer  books  shall  be  closed  for  two  days  prior  to  the  annual 
meeting  and  the  payment  of  dividends,  and  the  dividends  shall  be  paid 
to  the  stockholders  in  whose  name  the  stock  shall  stand  when  the 
books  are  closed. 

Art.  29.  The  officers  of  the  bank  are  strictly  prohibited  from  loaning 
its  funds  on  mining  stocks. 

Art.  30.  The  board  of  directors  shall  have  power  to  dispose  of  the 
stock  of  the  bank  at  rates  not  less  than  the  par  vahie,  and  after  the 
first  of  October,  1874,  may  fix  such  premiums  on  the  stock  as  in  their 
judgment  may  be  deemed  just. 

Art.  31.  All  persons  subscribing  to  the  capital  stock  of  the  bank  are 
required  to  sign  their  names  to  the  by-laws. 


COOPERATIVE  FIRE  INSURANCE. 

The  following  is  a  model  charter  (or  constitution) 
and  by-laws  for  a  cooperative  fire  insurance  company 
under  the  laws  of  Michigan,  but  may  have  to  be  varied 
in  other  sections  to  conform  to  the  State  law. 

Constitution. 
We  [here  insert  names  of  incorporators],  and  others,  residents  of 
County,  State  of ,  have  and  do  hereby  associate  togetlier 


(as  authorized  by  the  laws  of  the  State  of  Michigan)  for  the  purpose  of 
forming  an  incorporated  company,  to  be  denominated  and  known  as 

the  Farmers'  Mutual  Fire  Insurance  Company,  of County,  for  tlie 

transaction  of  mutual  insurance  upon  dwelling  houses,  barns  and  all 
kinds  of  out-buildings,  household  furniture,  goods,  wares  and  mer- 
chandise, stock  and  grain  contained  in  said  buildings,  or  being  upon 
farms  as  farm  property,  or  detached  private  risks  belonging  to  its 


OF  THE  COOPEBATIVE  FIEE    INSUEANCE.  30a 

members  away  from  business  centers ;  and  no  other  property,  real  or 
personal,  shall  be  insured  in  this  company. 

Name. 
Section  2.    This  company  shall  be  known  and  designated  as  "The 

Farmers'  Mutual  Fire  Insurance  Company,  of  County,"  and  its 

principal  office  of  business  shall  be  in  the  Village  of ,  in  

County, . 

Officers,  Term,  Quoritm  and  Removals. 

Sec.  3.  The  officers  of  this  company  shall  be  a  president,  vice-presi- 
dent, secretary,  treasurer,  and  a  board  of  not  less  than  seven  nor  more 
than  nine  directors  who  shall  hold  their  respective  offices,  unless 
removed  by  death  or  for  cause,  until  the  election  or  appointment  and 
qualification  of  their  successors  in  office ;  any  three  of  said  directors 
shall  constitute  a  quorum  for  the  adjustment  of  losses  and  may  fix  and 
approve  bonds  of  treasurer  and  secretary ;  and  any  officer  of  this  com- 
pany may  be  removed  at  a  special  meeting  by  a  vote  of  two-thirds  of 
the  members  present. 

Duties  of  Officers. 

Sec.  4.  The  president,  when  present,  shall  preside  at  all  meetings  of 
the  company,  sign  all  policies  which  may  be  done  in  blank,  be  ex- 
officlo  treasurer  of  the  company,  and  shall  execute  a  bond  in  its  favor 
with  good  and  sufficient  sureties  to  be  approved  by  the  board  and 
filed  with  the  chairman  thereof 

He  shall  furnish  a  monthly  exhibit  to  the  secretary  showing  all 
money  received  from  him  from  all  sources ;  also  all  orders  paid,  and 
the  balance ;  also  a  summary  of  the  same  to  the  board  at  their  annual 
meeting,  and  at  such  other  times  as  they  may  require. 

He  shall  pay  all  orders  drawn  by  the  direction  of  the  board,  and 
signed  by  the  chairman  and  secretary  thereof,  and  shall  receive  for 
services  well  and  faithfully  performed,  such  compensation  as  the 
members  at  their  annual  meeting  shall  allow. 

Sec.  5.  In  the  absence  of  the  president  the  vice-president  shall  pre- 
side ;  but  if  both  be  absent  a  president  pro  tempore  shall  be  chosen 
from  the  members  present ;  and  by  virtue  of  his  office  of  vice-president 
he  shall  be  a  member  of  the  board  of  directors  and  chairman  thereof. 

Sec.  6.  The  secretary  of  the  company  shall  be  ex-officio  secretary  of 
the  board  of  directors. 

He  shall  keep  a  book  or  books  in  which  he  shall  enter  in  writing  a 
full,  true  and'  perfect  record  of  all  doings  of  the  company,  and  also  of 
flie  board  of  directors,  and  record  the  appraisals  of  losses,  and  in  case 
of  loss,  notify  the  board  and  appoint  place  and  time  of  meeting,  which 
sliall  be  within  ten  days  after  notice  in  writing  of  said  loss  shall  have 
Vieeii  served  upon  the  secretary  and  at  or  near  where  said  property 
was  V>iirned  or  damaged. 

He  shall  keep  a  cash  acc<innt  for  the  company,  charging  In  all 
moneys  received  for  fees,  premiums,  interest  or  assessments,  and 
credK  ing  out  all  sums  paid  agents,  officers,  accounts  audited  by  the 
board  and  losses. 

He  shall  keep  an  office  open  diiring  business  hours  and  advertise  the 
same,  where  all  his  records  at  all  reiisonable  hours  shall  be  open  to 
inspection  of  all  members  of  the  company. 


306  MODEL  RULES   AND   WORKING   BY-LAWS 


He  shall  provide  all  necessary  blanks,  books  and  office  fixtures  under 
the  direction  of  the  board,  issue  all  policies,  levy  and  collect  all  assess- 
ments, and  on  the  last  Saturday  of  each  month  pay  over  to  the 
treasurer  all  moneys  of  the  couipany,  from  wliatever  sourse  received, 
taking  his  receipt  therefor. 

He  shall  have  the  appointment  and  supervision  of  the  company's 
agents,  who  shall  report  in  full  to  the  secretary  at  least  twice  a  month^ 
and  for  whose  acts  he  and  his  sureties  shall  be  responsible. 

He  shall  execute  a  bond  in  favor  of  tlie  company,  which  shall  be 
approved  by  the  board  in  such  sum  as  tlie  board  shall  direct,  which 
bond  shall  be  filed  witli  the  chairman  thereof,  conditioned  for  the 
faithful  and  proper  appropriation  of  all  company  money  which  may 
come  into  his  hands  by  virtue  of  his  office  of  secretary. 

He  shall,  upon  the  written  request  of  twenty  members,  or  by  order  of 
the  board  of  directors,  publish  llicir  call  for  a  special  meeting  in  at 
least  one  leading  secular  paper  in  each  County,  naming  object,  time 
and  place  of  such  meeting,  for  two  consecutive  weeks  previously. 

He  may  in  connection  with  any  two  members  of  the  board  adjudicate 
all  losses  not  exceeding  $200. 

He  shall  account  to  and  settle  with  the  board  at  their  annual  meet- 
ings, and  at  such  other  times  as  tliey  may  require. 

He  shall  make  a  report  at  each  annual  meeting,  exhibiting  a  clear 
and  concise  statement  of  tlie  condition  of  the  company,  and  publish 
the  same  in  some  leading  proper  in  each  County  the  first  week  of  each 
fiscal  year,  and  make  the  required  report  to  the  Commissioner  of 
Insurance  all  of  wliich  reports  shall  be  under  oath  of  the  treasurer  and 
secretary. 

He  shall  receive  for  services  for  self  and  agents  such  compensation 
as  the  members  at  the  annual  meeting  shall  allow ;  but  all  compensa- 
tion for  secretary's  services  shall  be  fixed  by  the  members  at  the 
annual  meeting  for  the  ensuing  fiscal  year  previous  to  his  election. 

Sec.  7.  The  board  of  directors  shall  have  the  general  fiduciary  super- 
vision of  the  affairs  of  the  company;  power  to  fill  all  vacancies  that 
may  occur  in  its  offices,  which  shall  be  for  unexpired  terms  only,  and 
make  and  adopt  all  needed  by-laws  for  the  government  of  its  officers 
and  members,  and  the  conduct  of  its  affairs,  to  inquire  into  and  talce 
necessary  evidence  under  oath;  adjudicate  all  losses  sustained  on  the 
property  of  its  members  herein  mentioned;  to  audit  all  claims  eqult- 
al)le  or  legal  against  the  company  subject  to  appeal  to  arbitrators  to 
order  all  assessments;  to  issue  all  orders  on  the  treasurer  which  shall 
be  signed  by  the  chaii-man  and  countersigned  by  the  secretary;  and  no 
moneys  of  this  company  shall  be  paid  other  than  by  order  of  its  board 
of  directors. 

They  shall  have  power  to  cancel  in  whole  or  in  part  any  policy, 
whenever  in  their  judgment  the  safety  or  interests  of  the  company 
may  so  require  by  paying  back  to  the  assured  stich  a  proportion  of  the 
company's  surplus  if  any,  as  his  insurance  bears  to  the  whole  amouiit 
of  insurance  of  the  conipany. 

They  shall  settle  with  the  secretary  and  treasurer  at  least  once  a 
year,  and  in  all  actions  or  suits  at  law  in  which  this  company  may  be  a 
party  the  chairman  of  the  board  of  directors  under  their  direction 
shall  act  for  and  represent  the  intei-esls  of  this  company. 

They  shall  In  their  discretion  diiecl  the  treasurer  to  loan  all  moneys 
pf  the  company,  not  required  for  immediate  losses  or  expenses. 


OF  THE   COOPERATIVE   FIEE    INSUEANCB.  307 

They  shall  define  the  conditions  on  which  policies  shall  be  Issued. 

Sec.  8.  Fifteen  members  of  this  company  shall  be  the  mlnimuin 
number  necessary  to  constitute  a  quorum  at  all  annual  and  special 
meetings  of  the  company. 

AJTNxrAL  Meetings. 

Sec.  9.  The  annual  meetings  of  this  company  shall  be  held  on  the 
first  Thursday  after  the  second  Monday  of  January,  and  the  fiscal  year 
shall  begin  on  that  day. 

Tlie  annual  meetings  of  directors  shall  be  held  on  the  first  Tuesday 
after  the  second  Monday  of  January. 

The  annual  meeting  of  members  shall  begin  at  ten  o'clock  A.  M.  in 
the  village  of  Allegan  at  such  place  as  the  board  shall  direct,  notice  of 
which  shall  be  conspicuously  inserted  in  one  leading  paper  of  each 
County  for  two  consecutive  weeks  previously. 

The  annual  meeting  of  the  board  shall  be  in  the  office  of  the  com- 
pany, notice  of  which  shall  be  mailed  each  director  in  due  season. 

Any  meeting  of  the  members  or  directors  may  be  adjourned  from 
time  to  time  as  may  be  necessary  until  the  business  of  such  meeting  is 
completed. 

Sec.  10.  The  regular  officers  of  this  company  shall  be  elected  at  the 
annual  meeting  by  a  majority  ballot — the  president,  vice-president, 
secretary  and  treasurer  once  in  two  years,  and  a  board  of  directors 
annually. 

Before  entering  upon  the  discharge  of  the  duties  of  their  respective 
offices,  eacli  of  said  officers  shall  signify  in  writing  over  his  own  signa- 
ture his  acceptance  of  such  office,  which  acceptance  shall  be  filed  with 
the  secretary  within  fifteen  days  after  such  election. 

Also  the  bond  of  the  secretary  and  treasurer  shall  be  filed  within  the 
time  aforesaid. 

Vacancies. 

Sec.  11.    An  office  shall  be  deemed  vacant  whenever  the  incumbent 
thereof  shall  die,  become  insane,  be  removed  from  office  or  resign. 
Membership. 

Sec.  12.  Any  person  may  become  a  member  of  this  company  whose 
risk  is  in  eitlier  of  the  said  Counties  of  Allegan  and  Ottawa  and  of  such 
a  character  as  specified  in  the  enumeration  of  risks— Section  1— by  sub- 
scribing his  or  her  name  to  such  application  therefor  as  the  company 
jirovlde  and  use  In  making  insurance  and  paying  to  the  secretary  one 
and  fifty  one-hundredths  dollars  membership  fee  and  two-tenths  of 
one  per  cent  on  tlie  amount  of  his  or  her  insurance. 

Any  member  may  enlarge  or  diminish  his  or  her  insurance  by  notify- 
ing tlie  secretary  of  tlie  company  (and  paying  an  office  fee  of  fifty  cents) 
and  in  case  of  enlargement  two-tenths  of  one  per  cent  on  such  increase. 

All  moneys  received  shall  constitute  a  contingent  fund  for  the  neces- 
sary expenses  of  the  company,  and  for  the  liquidation  of  its  losses  so 
far  as  the  same  may  apply. 

Withdrawal  and  Suspension. 

Sec.  13.  Any  member  may  at  any  time  withdraw  from  this  company 
by  returning  his  or  her  policy,  and  paying  all  claims  if  any,  against  the 
same;  and  each  member  shall  pay  his  or  lier  assessment  respectively 
to  the  secretary,  or  Ills  receiver,  within  thirty  days  after  due  notice  by 
mail  and  In  default  thereof  If  payment  be  not  made  within  thirty  days 


30S  MODEL  KULES   AND  WORKING   BY-LAWS 

thereafter,  said  delinquent's  insurance  may  be  suspended  by  the  secre. 
tary  or  board ;  and  if  payment  is  not  made  within  ninety  days  after 
due  notice  by  mail,  said  insiirance  shall  stand  suspended;  thereafter 
every  such  delinquent  shall  cease  to  have  any  right  in  or  claim  against 
tills  company  by  reason  of  any  policy  or  agreement  of  insurance  exe- 
cuted by  it,  but  such  delinquent  shall  continue  liable  for  all  demands 
due  from  him  or  her  to  this  company. 

Assessment. 

Sec.  14.  Assessment  shall  be  made  to  pay  losses  that  are  greater  than 
the  fund  on  hand.  All  members  assessable  are  to  be  equitably  assessed 
as  determined  by  the  board  from  tlie  date  of  insurance  and  the  resourses 
of  the  company,  and  no  assessment  shall  be  less  than  ten  cents  on  each 
one  hundred  dollars  of  insurance,  and  may  provide  as  surplus 
additional  a  sum  not  exceeding  one-tenth  of  one  per  cent  on  the  assets 
of  the  company. 

The  order  for  assessment  must  be  signed  by  the  chairman  of  the 
board  and  the  secretary,  and  shall  be  when  so  made  prima  facie 
evidence  of  the  truth,  justness  and  correctness  of  all  the  statements 
therein  contained  in  all  suits  and  actions  at  law  in  equity. 

Proportion  of  actual  Loss  Paid,  Time,  Etc. 

Sec.  15.  Tills  company  does  not  consent  to  an  insurance  exceeding 
three-fourths  cash  value  on  the  property  of  its  members  as  set  forth  in 
section  one  of  this  charter,  and  will  not  pay  more  than  three-fourths  of 
the  actual  cash  value  on  the  same,  but  will  pay  full  insurance  up  to 
that  amount ;  and  it  shall  be  optional  with  tlie  board  to  draw  their 
check  at  thirty  or  sixty  days  or  hire  the  money  and  pay  Immediately 
when  the  company's  surplus  would  render  an  assessment  necessary. 
Assignments. 

Sec.  16.  Policies  may  be  assigned  to  purchasers  of  the  property  it 
covers,  provided  the  assignment  of  the  property  is  duly  reported  to  the 
company,  and  provided  the  assignee  pays  one  and  fifty  one-hundredths 
dollars  membership  fee,  unless  already  a  member,  in  which  case  the 
fifty  cents  office  fee  only. 

What  Invalidates  this  Policy. 

Sec.  17.  This  entire  policy,  unless  otherwise  by  agreement  endorsed 
hereon  or  added  hereto,  shall  be  void  if  the  insured  now  has  or  shall 
hereafter  make  or  procure  any  other  contract  of  insurance,  wliether 
void  or  not,  on  property  covered  in  whole  or  in  part  by  this  policy;  or 
If  the  hazard  be  increased  by  any  means  within  the  control  or  knowl- 
edge of  the  Insured;  if  mecjianies  be  employed  in  building,  altering  or 
repairing  the  within  described  premises  for  more  than  fifteen  days  at 
anyone  time;  or  if  the  interest  of  the  insured  be  other  than  uncon- 
ditional and  sole  ownership;  or  if  the  subject  of  insurance  be  a  build- 
ing on  ground  not  owned  by  the  assured  in  fee  simple;  or  if  the  object 
of  insurance  be  personal  property  and  be  or  become  encumbered  by  a 
chattel  mortgage;  or  if  with  the  knowledge  of  the  insured  foreclosure 
proceedings  be  commenced  or  notice  given  of  the  sale  of  any  property 
covered  by  this  policy  by  virtue  of  any  mortgage;  or  if  this  policy  be 
assigned  before  a  loss;  or  if  a  building  herein  described  whether 
Intended  for  occupancy  by  owner  or  tenant,  be  or  become  vacant  or 
unoccupied  and  so  remain  for  ninety  days;  or  if  fire  is  used  in  build- 


OF  COOPEEATIVE  FIEE    INSURANCE.  309 

tags  unprovided  with  properly  constructed  chimneys ;  or  if  the  ashes 
are  not  properly  disposed  of;  or  if  open  lights  be  used  in  barns;  or  if 
smoking  is  practiced  or  allowed  in  barns. 
By-Laws. 

1.  This  company  will  not  be  liable  for  losses  occasioned  by  stove 
pipes  passing  through  combustible  floors,  unless  protected  by  sufficient 
ventihvtor  or  tliinible,  and  entering  a  properly  constructed  chimney. 

2.  This  company  will  not  be  liable  for  losses  occasioned  by  placing 
ashes  in  any  combustible  building,  or  vessel,  or  by  storing  taem  less 
tlian  thirty  feet  from  building,  or  by  the  burning  of  smoke  houses. 

3.  An  insurance  effected  by  a  member  holds  good  to  his  or  her  legal 
representatives  for  two  years  from  the  date  of  the  decease,  provided 
all  assessments  are  promptly  paid ;  it  being  permissible,  however,  dur- 
hig  the  time  aforesaid  to  surrender  the  policy,  and  have  a  new  one 
Lssued  to  the  legal  representatives,  on  payment  of  office  fee  of  fifty 
cents. 

4.  A  member  may  have  his  or  her  policy  made  payable  in  case  of 
loss,  to  a  mortgagee  therein  named  as  his  or  her  interest  may  appear, 
and  as  shown  from  said  members  application  on  file  with  the  secretary. 

5.  In  the  appraisal  of  loss  or  damage  of  live  stock,  the  following 
rules  shall  control  and  limit  the  action  of  the  board  of  directors:  1st, 
on  horses — the  intrinsic  valuation  for  farm  purposes  shall  be  the  basis 
of  their  appraisal ;  2d,  on  cattle— the  intrinsic  valuation  for  labor, 
for  the  daii-y,  and  for  slanghter  shall  be  the  basis  of  such  appraisal; 
3il.  on  sheep— the  intrinsic  value  for  wool  and  for  slaughter  shall  be 
the  basis  for  their  appraisal  except  as  values  are  increased  by  agree- 
ment with  this  company. 

6.  All  policies  shall  bear  date  and  take  effect  at  twelve  o'clock  noon 
on  the  day  the  application  shall  be  made  to  the  secretary  or  his  agent,  If 
the  same  shall  be  accepted  by  the  secretary,  unless  the  applicant 
shall  desire  a  subsequent  day ;  then  on  sucli  day  at  twelve  o'clock  noon- 

7.  The  application  for  insurance  shall  be  signed  by  the  applicant  or 
his  legal  representative  which  shall  be  construed  as  a  part  of  the 
contract  of  insurance,  and  shall  be  regarded  as  the  warranty  of  the 
truth  of  all  facts  stated  tliereln,  and  shall  be  filed  in  the  office  of  the 
secretary. 

8.  When  any  member  shall  sustain  a  loss,  he,  his  attorney  or  agent 
shall,  within  ten  days  thereafter,  deliver  to  the  secretary  a  particular 
statement  in  writing  thereof;  and  at  any  meeting  of  the  board  for 
a<)justment  of  the  same  the  directors  shall.  In  their  discretion,  exam, 
ine  or  cause  to  be  examined  critically,  all  available  evidence  bearing 
npon  the  loss  in  question  and  to  require  of  the  member  who  has  sus- 
tained such  loss  an  estimate  of  the  present  cash  value  of  property  lost, 
a  statement  of  how  and  by  whom  occupied  at  the  time,  Iiow  the  fire 
originated  to  the  best  of  his  knowledge  and  belief,  and  th.at  the  loss 
occurred  without  fraud  or  evil  practice  on  his  part;  also  what  Interest 
he  had  In  the  property  at  the  time;  whether  any  other  Insurance 
existed  thereon,  and  If  so  what  amount.  Any  other  matter  of  Inquiry 
may  be  elicited  and  the  whole  under  oath,  if  deemed  necessary  by  the 
committee  of  adjustment;  and  If  there  be  any  fraud  or  false  swearing, 
with  fraudulent  Intent,  the  claimant  shall  forfeit  all  claims  by  virtue 
of  any  policy  of  this  company  for  his  Joss. 


810  MODEL  EULES  AND  WORKING   BT-LAWS 


9.  Upon  the  board  of  directors  making  an  assessment  upon  Its  mem- 
bers, the  secretai-y  shall  as  soon  thereafter  as  said  board  shall  direct 
mail  notices  to  each  member  of  their  respectfve  assessments.  Ninety 
(lays  after  such  notices  have  been  mailed  by  the  secretary  he  shall 
mail  a  second  notice  to  all  such  members  as  have  not  at  that  date  paid 
tlieir  assessment,  adding  thereto  a  penalty  of  ten  per  cent;  thirty  days 
after  said  second  notices  have  been  mailed  the  secretary  shall  make  a 
list  of  all  such  members  tlien  delinquent  and  who  have  not  paid  their 
assessment,  and  shall  take  Immediate  steps  for  the  collection  thereof. 

10.  Whenever  additional  insurance  is  obtained  by  a  member,  his 
application  therefor  shall  fully  set  forth  any  and  all  material  changes 
which  increase  the  hazard  since  the  date  of  the  original  policy;  includ- 
ing any  transferor  incumbrances  of  said  property,  any  and  all  changes 
in  the  relation  of  the  parties,  which  would  alter  the  right  of  the  par- 
ties with  regard  to  the  original  contract  of  insurance,  and  any  failure 
or  neglect  on  the  part  of  any  member  to  clearly  make  known  any  such 
increased  hazard  the  secretary  or  his  agent  shall  void  the  policy. 

11.  In  case  .of  a  partial  loss  on  a  joint  insurance  this  company  will 
only  pay  such  a  proportion  of  the  whole  loss  sustained  as  its  insurance 
bears  to  the  whole  amount  insured. 

12.  Any  insurance  effected  by  this  company  on  live  stock  and  imple- 
ments, shall  be  limited  to  the  premises  described  in  the  application 
and  policy,  with  this  exception:  that  any  member  being  away  from 
his  said  premises,  or  in  an  adjoining  County  with  any  of  said  property 
the  insurance  shall  extend  to  and  cover  the  same  during  such  tempo- 
rary absence,  provided  that  this  company  will  pay  no  loss  from  the 
injury  or  destruction  of  any  of  such  property  (except  in  cases  of  light- 
ning), if  damages  or  loss  occurs  to  the  same  in  any  building  which  by 
the  charter  and  by-laws  is  not  insurable  in  this  company  if  located  in 
Allegan  or  Ottawa  County. 

13.  All  insurance  shall  stand  suspended  when  engines  are  used  for 
threshing  that  are  known  to  be  defective,  or  the  engineer  known  to  be 
proverbially  careless,  or  when  wind  blows  directly  or  obliquely  from 
engine  to  barn  or  stack,  or  when  less  than  twenty  feet  intervenes 
between  engine  or  building  or  stack,  or  when  all  due  care  and  caution 
is  not  observed  by  the  member  and  policy-holder;  provided,  liowever> 
that  if  a  member  shall  be  able  to  show  to  the  satisfaction  of  the  com- 
pany that  a  loss  did  not  occur  through  his  failure  to  observe  any  of  tlie 
precautions  above  mentioned,  or  his  using  all  due  care  and  cautioTi, 
then  such  failure  shall  not  cause  a  forfeiture  of  his  insurance;  but  in 
no  other  case  will  the  company  be  liable  for  a  loss  when  such  precau- 
tions and  care  are  not  observed  and  taken. 

14.  Gasoline  or  kerosene  may  be  used  for  cooking  purposes  on  con- 
dition that  said  gasoline  shall  not  be  stored  on  the  premises  in  larger 
quantities  than  five  gallons,  and  shall  not  be  stored  in  any  building 
where  flre  or  lights  are  used;  nor  shall  stoves  or  lights  be  refilled  or 
replenished  while  burning. 

15.  Detached  private  risks  belonging  to  members  referred  to  in  the 
charter  shall  be  situated  at  least  one  hundred  feet  from  any  exposure. 

16.  All  losses  not  exceeding  §5,000  maybe  paid  by  a  loan  of  fiinrls 
upon  the  credit  of  the  company,  unless  in  the  judgnient  of  the  board 
of  directors,  or  bv  authority  of  this  company,  an  assessment  sliall  be 
made.  And  the  directors  are  hereby  authorized  to  make  sucli  loan  or 
any  portion  thereof,  from  time  to  time,  as  in  their  judgment  may  be 
deemed  necessary,  the  same  to  be  refunded  by  an  assessment  when 
the  losses  shall  exceed  that  amount  (or  as  their  judgment  may  dictate, 
as  above  specified). 


DIRECTORY  OF  COOPERATIVE  ENTERPRISES. 


If  more  information  is  wanted  about  the  details  of 
any  form  of  cooperative  effort  described  in  this  book,  a, 
letter  of  inquiry  (with  stamps  for  return  postage),  speci- 
fying the  precise  points  wanted,  if  addressed  to  any  of 
the  following  list  of  enterprises  of  the  class  about  which 
more  details  are  wanted,  will  probably  bring  the  desired 
reply. 


Other  Cooperative  Stores,  Mills,  Etc. 

[See  also  Pages  36-158.] 

Worcester,  Massachusetts,  was  long  the  headquarters  of  the  Sover- 
eigns of  Industry,  and  the  principles  of  cooperation  taught  by  that 
order  took  deep  root  in  this  city.  Several  cooperative  stores  still 
thrive  tliere. 

The  Sovereigrn's  Co-operative  Store,  9  Pleasant  street;  J.  P.  Cheney, 
agent;  Incorporated  April  20,  1875,  with  $650  capital,  which  now 
amounts  to  about  $3,300.  Its  statement  Jan.  1, 1891,  showed  merchan- 
dise to  the  amount  of  $2,305,  real  estate  $1,806,  cash  and  other  assets 
$2,841,— a  total  for  assets  of  $6,952.  The  liabilities  were,— shares  of 
stock  $2,965,  mortgage  on  real  estate  $1,200,  redemption  fund  $816,  divi- 
dends and  Interest  unpaid  $433,  bills  for  merchandise  and  all  other  lia- 
bilities $1,231,— a  total  of  $6,647.  Five  per  cent  per  annum  was  paid  on 
capital,  ten  per  cent  of  the  net  profits  credited  to  the  redemption  fund, 
two  and  one-half  per  cent  of  the  profits  added  to  the  contingent  fund, 
the  balance  going  to  dividend  on  purchasers,  which  lias  varied  from 
four  to  seven  percent.  "We  redeem  shares  at  the  option  of  holders, 
and  have  almost  always  been  able  to  do  this  without  difflctilty.  My 
fifteen  years'  experience  convinces  me  that  faithful,  careful  and  lion- 
est  management,  together  with  loyally  on  the  part  of  tlie  members, 
will  secure  success  to  a  greater  or  less  degree.  Failure  of  cooperative 
associations  can  be  traced  to  lack  of  dne  or  all  of  these  perquisites." 

311 


312 


HOW  TO  COOPEEATE. 


Protective  Union,  Division  No.  42,  Instituted  Dec.  18, 1847,  is  one  of 
the  very  few  of  tlie  old  Union  stores  tliat  still  exists.  It  publishes  no 
statement,  but  the  by-laws  limit  membership  to  one  hundred  persons 
"  of  good  moral  character,  who  do  not  use  or  vend  intoxicating  drinks 
as  a  beverage,"  admitted  by  a  two-thirds  vote  of  all  the  members  upon 
payment  of  an  admission  fee  equal  to  one  share  of  the  divisions'  net 
assets.  Shares  are  not  transferable,  but  seventy-five  per  cent  is  paid 
back  on  withdrawal.  No  credit  is  allowed,  and  the  net  profits,  above 
reserves,  are  "  divided  equally  among  the  members  annually  "—equiv- 
alent to  dividend  on  capital  only,  since  each  member  holds  an  equal 
interest. 

The  Swedlsb  Mercantile  Co-operative  Association,  9  Prospect 
street,  Arvid  Johnson,  Manager,  incorporated  October,  1884,  with  au- 
thorized capital  of  $5,000,  no  one  holding  over  twenty  shares.  The 
original  sixty-four  members  have  increased  to  two  hundred,  but  many 
shares  have  been  redeemed  for  members  who  left  the  city.  The  com- 
pany has  the  first  right  to  purchase  shares  "  at  a  price  fixed  by  a  share- 
holders' meeting,"  but  one  cannot  withdraw  until  at  least  six  months 
a  member,  thirty  days'  notice  of  withdrawal  being  required.  Ten  per 
cent  of  the  net  profits  are  by  law  required  to  be  set  aside  for  the  sink- 
ing fund,  but  most  of  the  balance  has  been  paid  in  interest  on  capital 
only  (although  shareholders  had  but  one  vote),  thus  violating  the  first 
principle  of  cooperation,  which  would  divide  profits  in  dividends  on 
cash  purchases.  Had  this  been  done,  the  rebate  would  have  been  four 
to  six  per  cent.  Goods  were  sold  at  tlie  same  prices  to  all,  and  the 
society  had  a  manager  who  possessed  tlie  confidence  of  the  Swedes 
and  Germans,  who  principally  comprised  the  membership.  Annual 
meetings  of  shareholders  and  monthly  of  directors  are  held,  with  an 
annual  taking  of  stock  and  auditing.  The  association's  success  appears 
from  these  comparisons : 


First  year,  1885 

Second  year,  1886. 
Third  year,  1887... 
Fourth  year,  1888. 
Fifth  year,  1889  . . . 
Sixth  year,  1890... 


Capital. 


$1,400 
1,935 
3,955 
6,445 
8,000 

10,000 


Sales. 


$15,000 
19,356 
20,100 
38,363 
43,701 
47,189 


Expenses 


$3,210 
4,115 
5,186 
5,690 
6,445 


Profits.  I  Divided. 


$263 
800 
1,040 
1,551 
1,840 


The  First  Swedlsb  Co-operative  Store  Company  of  Worcester  is 
very  successful.  Expenses  are  kept  down,  and  the  two  hundred  mem- 
bers give  the  store  a  steady  trade  for  cash.  On  a  capital  stock  of  $3,000 
and  a  sinking  fund  of  $1,800,  the  sales  of  1890  were  $49,029.  The  gross 
profits  were  $3,525,  of  which  five  per  cent,  or  $166  was  set  aside  for  the 
sinking  fund  and  $300  for  ten  per  cent  interest  on  capital,  leaving 
$2,853  as  net  profits  to  be  paid  in  dividend  on  purchases.  For  the  four 
years  the  store  has  been  running  members  have  been  returned  eight 
per  cent  on  purchases,  and  non-members  three  per  cent.  Prices  are 
kept  on  a  level  with  prices  in  other  stores. 

The  Lisbon  Falls  (Me.)  Co-operative  Association,  for  the  six  months 
ended  Feb.  6,  '91,  showed  sales  to  members  of  $15,549,  and  to  non-mem- 
bers $4,428,  a  total  of  $19,977.  Tlie  profits  were  $1,419,  of  which  $175  was 
added  to  the  permanent  fund  (making  it  $1,225),  and  $1,244  was  used  to 
pay  an  eight  per  cent  dividend  on  members'  purchases.    The  receipts 


OTHEB  COOPERATIVE   STOEES. 


313 


during  the  six  montlis  were  $20,213,  of  wliicli  $755  was  for  new  shares, 
the  balance  being  sales,  cash  and  rents.  The  expenditures,  (including 
cash  on  hand)  foot  up  a  like  sum,  mostly  for  mercliandise,  though  $410 
were  shares  brought  in.  Tlie  expenses  were  only  $1,235,  exclusive  of 
$131.50  interest  on  taxes,  or  only  a  fraction  over  six  per  cent  on  the 
business  done,  indicating  very  careful  and  economical  management; 
this  is  f urllier  proven  by  the  fret  that  expenses  in  the  six  years  have 
been  within  an  average  of  one  per  cent.  Tlie  liabilities  foot  up  $13,395,  of 
which  $9,210  is  capital,  $263  interest  on  same,  $1,453  bills  payable,  $1,050 
permanent  fund  and  $1,419  profit.  The  assets  embrace  stock  in  store 
$5,651,  real  estate  (a  few  two-story  buildings,  the  rents  from  which  make 
the  store's  rent  almost  nothing,  $6,900,  fixtures  $715,  cash  owing  asso- 
ciation $725  (  only  three  and  one-fourth  per  cent  on  sales,  showing  liow 
well  cash  payment  is  enforced)  unexpended  insurance  and  taxes  $110, 
cash  $294.  Tlie  members  have  increased  from  twenty-nine,  with  $750 
capital,  to  one  hundred  and  seventy-five  with  $9,210  capital ;  the  aver- 
age dividend  on  purchases  has  been  nine  per  cent  (a  total  of  $12,139), 
besides  three  per  cent  semi-annually  on  capital  (total  $2,576),  making 
total  returns  to  members  of  $14,715,  or  thirty-two  per  cent  per  annum  on 
the  average  capital  employed,  exclusive  of  the  reserve  fund.  The 
details  of  this  progress  appear  thus : 


Capital. 
Stock. 

Net 
Sales. 

Interest. 
%        Amt. 
3          $29.48 
3            48.23 
3          132.66 
3          199.24 
3          275.11 
3          297.80 
3          292.07 
3          267.56 
3          252.47 
3          271.09 
3          246.41 
3          263.35 

Dividends. 
%        Amt. 

First  six  months 

Second  six  months 

Third  six  months 

Fourth  six  months 

Fifth  six  months 

Sixth  six  months 

Seventh  six  months... 

Eighth  six  months 

Ninth  six  months 

Tenth  six  months 

Eleventh  six  months  .. 
Twelfth  to  Feb.  6,  '91.. 

$1,115 
1,725 
6,425 
8,685 
9,650 

10,155 
9,405 
9,095 
9,024 
9,340 
8,856 
9,210 

$3,505 
7,100 
10,563 
14,802 
17,548 
17,692 
18,808 
18,538 
18,285 
20,333 
17,624 
19,977 

10        $317 
12           666 
15        1,275 
9        1,103 
10        1,623 
5           748 
5           799 
8        1,249 

7  1,042 

8  1,246 
7           928 
7        1,244 

Total  (six  years) 

•$7,724 

t$184,675 

•3  t$2,675.47 

•9     tl2,139 

•Average.  tTotal. 
Fenton  Haigh,  the  president,  frankly  admits  the  early  mistake  of 
paying  out  all  the  earnings  in  dividends,  but  thinks  it  is  rectified  by 
adding  $175  semi-annually  to  the  permanent  fund.  "  This  fund  is  most 
essential,  keeping  the  members  together,  as  tliey  can't  withdraw  it, 
and  should  be  Insisted  upon  at  the  start."  Competent  officers  that  the 
members  can  rely  upon  are  also  employed,  with  few  changes  in  man- 
agement. Non-members  get  no  dividend,  in  order  to  encourage  all  to 
join,  but  if  a  family  is  too  poor  to  join  the  dividend  on  tlieir  purchases 
is  placed  to  their  credit  until  it  amounts  to  one  share.  "In  this  way 
many  a  poor  family  has  got  a  few  dollars  ahead."  Goods  are  sold  at 
current  retail  prices ;  one  merchant  tried  to  run  out  the  "  coiip,"  but 
failed,  and  the  "coops"  bought  his  stock  at  assignees'  sales;  the  store 
has  also  bought  out  two  other  merchants.  Tlie  place  Is  a  small  one, 
with  one  woolen  mill  and  a  saw  mill,  the  employes  of  which  (German, 
English,  Irish,  Scotch,  French  and  Hungarians),  with  some  of  the  farm- 
ers, make  up  the  membership.  Stock-faking  Is  done  of  an  evening, 
wltb  the  help  of  several  members.    Running  accounts  are  kept  with 


314  HOW  TO   COOPERATE. 

the  farmers  who  bring  in  produce,  and  the  day  boolc  and  ledger  is  done 
away  witli  except  for  the  farmers'  trade.  Tliere  are  two  pass-boolcs 
for  each  member,  with  the  same  number  in  eacli  and  a  pigeonliole  in 
the  store  of  the  corresponding  number.  Here  one  of  the  books  is  kept, 
the  entry  of  sales  being  made  on  each,  and  the  member  keeps  the  other 

The  L,inn  County,  Kansas,  Patrons  Co-operatlTe  Association,  ac- 
cording to  Edward  Blair,  the  manager,  is  verj'  successful,  the  more  so 
since  it  is  located  at  Codmus, — a  hamlet  composed  of  the  store,  two 
blacksmith's  shops  and  a  church  six  miles  from  the  railroad.  Mr. 
iilair  writes :  "  We  began  business  in  1875,  with  about  $50  capital.  The 
stock  has  been  increased  until  we  have  over  $7,000  invested  in  goods 
and  $2,500  in  buildings.  This  business  was  begun  npon  a  cash  plan, 
but  gradually  drifted  into  the  credit  system.  In  1886  we  became  con- 
vinced that  the  credit  system  would  ruin  us,  and  slmt  down  to  spot 
cash  or  no  trade.  It  caused  kicking,  but  we  knew  it  was  our  only  sal- 
vation. The  year  before  we  had  sold  about  $10,000  worth  of  goods.  In 
1886  we  sold  $11,000,  increasing  sales  about  $1,000  each  year  until  this 
year,  in  which  our  sales  reach  $17,000,  all  cash.  We  pay  cash,  and  get 
the  benefit  of  cash  discounts.  Our  clerks  are  willing  to  work  for  less 
wages,  as  they  are  not  obliged  to  "thrash"  half  the  customers  for 
kicking  at  being  dunned. 

"  Our  building  has  been  increased  in  size  until  we  have  3,840  feet  of 
floor  room.  The  capital  stock  is  divided  into  shares  of  five  dollars 
each.  Only  Patrons  of  Husbandry  are  eligible  to  membership.  Inter- 
est at  the  rate  of  six  per  cent  is  paid  upon  the  capital  stock,  which 
amount  is  first  taken  out  of  the  profits  of  the  year's  business.  About 
one-half  the  remainder  is  applied  to  a  reserve  fund ;  balance  divided 
among  members  in  proportion  to  their  trade.  We  have  a  reserve  fund 
of  about  $3,000.  Cooperative  stores  usually  fail  if  credit  is  given  or  a 
sinking  fund  is  not  provided." 

The  New  Bedford  (Mass.)  Central  Union  is  not  cooperative  but  a 
partnership,  like  a  similar  store  at  Worcester,  Mass.  It  was  organized 
June  14, 1848,  as  the  Workingmen's  Protective  Association,  afterwards 
changed  to  the  New  England  Protective  Association,  No.  55,  and  in  1861 
adopted  the  present  name.  The  membership  is  three  hundred  and 
fifty-two,  but  no  new  members  have  been^aken  in  for  fifteen  years, 
during  which  earnings  have  been  divided  annually,  amounting  to 
from  $5  to  $13  per  year  per  member.  The  original  members  paid  $10 
for  their  certificates,  but  since  the  association  stopped  taking  mem- 
bers the  shares  have  sold  for  $100  to  $160,  although  the  withdrawal 
value  or  what  might  be  called  the  par  value  is  only  $30  a  share.  Mem- 
bers buy  at  a  price  about  five  per  cent  less  than  is  charged  outsiders, 
each  member  having  but  one  share.  Tlie  business  is  very  successful, 
the  sales  for  the  year  ended  March  1,  1891,  being  $106,919,  expenses 
(not  including  freight)  $9,938,  leaving  profits  for  tlie  year  of  $2,810,  as 
reported  by  Benjamin  F.  Brownell,  treasurer.  Cash  payments  are 
insisted  upon,  but  the  constitution  embraces  the  following  important 
proviso: 

"It  shall  be  the  settled  policy  of  this  association  not  to  accumulate 
and  hold  in  reserve  any  funds  over  the  actual  wants  of  the  store  for 
business  purposes,  and  such  accumulations  as  may  be  made  from  year 
to  year  beyond  such  actual  wants,  tlie  directors  shall  distribute  among 
the  members  in  dividends  pro  rata,  at  or  near  the  time  of  each  annual 
meeting,  or  at  shorter  intervals  if  it  shall  seem  to  them  expedient." 


OTHEE    COOPERATIVE    STORES.  315 


Clarke  County,  Washington,  has  three  cooperative  stores,  all  under 
gi'ange  auspices,  there  being  thirteen  subordinate  granges  in  the 
county.  The  first  was  started  in  April,  1890,  at  Vancouver,  capital  $900, 
shares  f  5,  held  in  small  lots,  the  profits  being  divided  among  the  cus- 
tomers by  an  issue  of  shares,  the  money  to  remain  in  the  business. 
The  next  was  at  La  Camas,  $1,600  capital,  mostly  held  by  two  or  three 
men,  profits  being  divided  among  them  by  an  issue  of  stock  to  increase 
the  capital.  The  one  at  Washougal  started  last,  dividing  net  profits 
between  customers  and  stockholders.  They  are  all  prosperous,  having 
live,  energetic,  honest  managers,  and  meet  the  approval  of  the  com- 
munity. "  It  was  predicted  that  the  La  Camas  cooperation  would  fail 
in  a  short  time.  But  one  of  the  prophets  failed  six  months  later,  and 
the  coops  were  strong  enough  to  buy  the  bankrupt  stock  for  $6000." 

The  Davison  (Mich.)  Co-operative  Association  was  incorporated  in 
January,  1890;  capital  $5,000,  shares  $10,  held  by  one  hundred  Patrons 
of  Industry  in  blocks  of  ten  to  fifty  shares ;  general  merchandise  and 
agricultural  implements.  Cash  dealings,  first  year  at  fifteen  per  cent 
above  cost,  now  twelve  and  one-half  per  cent.  In  eleven  and  one-half 
months,  to  January,  '91,  earned  twenty-three  cents  on  the  dollar,  paid 
ten  per  cent  on  capital,  leaving  three  per  cent  in  the  business.  "  Tlie 
business  men's  association  tried  to  get  wholesalers  to  boycott  us  at  the 
start,  but  we  found  that  money  would  buy  goods,  and  they  are  all 
anxious  to  sell  to  us  now." 

At  Kingston,  Plymouth  County,  Mass.,  cooperation  was  inaugu- 
rated In  the  village  of  Silver  Lake,  under  the  auspices  of  the  Sover- 
eigns of  Industry,  June  14,  1875,  and  was  incorporated  May  21, 1877, 
under  tlie  name  of  the  Cooperative  Store  Company.  It  was  organized 
at  the  start  on  the  Rochdale  plan,  and  has  been  so  conducted  ever 
since.  Beginning  with  $460  capital,  this  increased  to  $1,170  two  years 
later,  and  at  the  end  of  1890  the  capital  was  $1,805,  with  twenty-six 
m<!mbers.  The  sales  from  1877  to  1890  inclusive  amounted  to  $144,118^ 
the  average  exi)enses  being  about  $920  a  year,  and  the  profits  $400  to 
$500.  After  providing  for  depreciation  and  contingent  fund,  the  profits 
were  first  divided  in  dividends  on  trade,  amounting  to  from  five  to 
seven  per  cent,  besides  which  six  per  cent  interest  was  paid  on  capital. 
The  reserve  fund  accumulated  amounts  to  $1,087,  or  more  than  half 
the  capital  stock.  An  abundance  of  competition  has  been  met  by  fur- 
nishing pure  goods  at  fair  market  prices  and  keeping  down  expenses. 
Prices  have  been  the  same  to  all,  patrons  keeping  their  accounts  by 
trade  checks,  and  dividends  being  paid  on  checks  returned.  "When  it 
is  remembered  that  Silver  Lake  is  a  small  village,  it  will  be  seen  that 
cooperation  is  as  well  adapted  to  small  as  to  large  places.  Henry  B. 
Maglathlan,  president  and  manager,  writes:  "We  have  always  made 
a  mistake  wlien  we  have  attempted  to  deviate  from  the  Roclidale  plan 
of  spot  cash  transactions.  A  strong  point  of  our  success  has  been  in 
securing  a  location  on  the  platform  of  a  railroad  station,  so  as  to  avoid 
expenses  of  handling  our  goods,  while  at  the  same  time  being  where 
the  public  can  trade  wltliout  coming  for  that  pnrpKJse  alone."  Tiie 
above  statements  were  made  under  date  of  March  12,  1891.  A  copy  of 
the  semi-annual  report  for  the  six  months  ended  April  1,  1890,  was  also 
forwarded,  which  we  print  in  full  as  giving  a  further  Insight  Into  the 
management  of  a  small  enterprise  but  a  large  success: 


316  HOW  TO   COOPEBATE. 


The  "  hive  of  bees,"  a  symbol  of  industry,  economy  and  equity,  has 
been  aptly  chosen  as  the  emblem  of  cooperation  on  the  Rochdale  plan. 
Upon  uas  plan  our  store  has  continued  to  prosper,  because  its  methods 
were  n»ore  simple,  just  and  economical  than  ordinary  business.  Not- 
wiihstanding  the  low  prices  of  certain  staple  articles,  with  no  team 
delivery  or  lilce  device  to  influence  trade,  the  sales  of  the  store  for  the 
six  months  ending  March  31,  1890,  have  amounted  to  $5,154.19.  Com- 
pared with  the  corresponding  six  montlis  of  last  year,  this  is  a  gain  of 
1872.65.  The  trade  for  the  last  year  exceeds  that  of  two  years  ago  by 
$1,379.42.  The  incidental  expenses  for  the  six  months  have  been: 
Salesman's  wages,  $216;  freights,  $49.94;  expresses,  $28.65;  agency  ex- 
penses, $31.25;  postage,  $7.40  printing,  $5;  wrappers  and  twine,  $12.50; 
ice,  $4.20;  coal,  $13;  miscellaneous,  90  cents;  or  in  all,  $368.84.  Add  for 
rent,  $72,  and  for  State  tax,  $26.50,  and  the  total  is  $467.34.  The  net 
profits  have  been  distributed:  To  interest  on  the  capital  stock,  at  the 
rate  of  six  per  cent  per  annum,  $64;  to  dividend  on  trade  checks,  at 
five  per  cent,  $46.32,  and  to  contingent  fund,  $60.  Let  us  remember,  by 
saving  from  spendings,  little  by  little,  we  can  accumulate  money,  get 
capital,  and  so  save  witliout  depriving  ourselves  of  a  single  article  we 
have  tlie  means  of  purchasing-  This  is  the  moral,  social  and  salutary, 
of  cooperation.  The  balance  sheet  shows  for  assets:  Merchandise, 
$1,455;  fixtures,  $45;  cash,  1,406;  total  assets,  $2,906.  Liabilities— capi- 
tal stock,  $1,800;  contingent  fund,  $640;  educational  fund,  $105;  un- 
called for  dividends,  $100;  allowance  for  depreciation,  $101;  balance 
of  profits,  $160;  total  liabilities,  $2,906. 

What,  a  Maine  Grange  has  Done.— "Our  grange  at  South  Paris 
bought  phosphate,  sugar,  grass  seed  and  other  supplies  together,  be- 
ginning in  a  small  way  until  we  would  have  at  times  $1,500  invested  in 
goods.  We  got  only  what  was  sure  to  sell,  never  kept  dry-goods  and  but 
a  very  small  stock  of  boots  and  shoes.  At  first  we  kept  open  only  half 
a  day  in  the  week,  but  afterwards  two  afternoons.  Goods  were  sold  at 
a  slight  advance  on  cost,  as  we  did  not  care  to  make  money  but  save 
it,  and  by  so  doing  could  hold  our  members  and  be  a  strong  regulator 
on  prices  in  the  village.  We  have  never  been  incorporated  but  have 
controlled  the  trade  in  the  grange,  taking  account  of  stock,  and  the 
manager  being  under  bonds." 

Thus  writes  O.  G.  Curtis,  the  agent,  who  emphasizes  the  necessity  of 
an  honest  business  manager.  He  adds  that  in  this  simple  form  of 
cooperation  he  would  not  advise  selling  to  non-members  at  the  same 
price,  nor  try  to  keep  prices  secret,  as  the  latter  cannot  be  done.  "  The 
success  in  this  farming  town  has  been  in  keeping  open  store  only  a 
short  time  in  the  week,  doing  lots  of  business  when  it  was  open,  and 
thus  keeping  down  expenses  and  avoiding  credits.  Its  management 
speaks  for  itself  in  that  the  loss  by  bad  bills  has  been  only  $2.70  in  a 
business  of  $40,000."  What  might  have  been  done  if  the  enterprise  had 
been  run  on  true  cooperative  lines,  profits  saved  and  the  affair  con- 
ducted on  strict  business  principles ! 

A  Similar  Flan  has  been  adopted  by  the  CoSperative  Trade  Associa- 
tion of  Norway,  Me.,  which  buys  its  goods  in  bulk  through  the  grange 
agent,  C.  E.  Knight,  209  Commercial  street,  Portland,  Me.,  dividing  the 
same  as  soon  as  delivered  and  paying  for  the  goods  within  thirty  days. 
"  We  only  trust  those  who  have  good  backers.  We  have  practiced  this 
system  for  twenty  years  and  make  quite  a  saving.  We  make  no  profit, 
simply  pay  a  man  for  looking  after  the  buying,  and  the  Patrons  get  the 
rest."  This  is  one  of  the  simplest  forms,  which  is  better  than  nothing, 
but  which  might  well  be  extended  according  to  the  sound  lines  out- 
lined in  the  first  four  chapters  in  tliis  book. 


OTHER   COOPERATIVE   STORES.  81? 


^lood  Work  in  a  Small  Way. — The  same  plan  was  adopted  at  the 
start  by  the  Baskahegan  Grange  (Me.),  then  money  was  borrowed  to 
build  a  hall,  dining  room  and  store,  and  lay  in  a  small  stock  of  goods. 
The  profits  of  trade  and  the  income  from  entertainments,  grange  dues, 
etc.,  in  time  paid  for  the  store,  at  wliich  full  retail  prices  were  charged. 
Mismanagement  followed,  Patrons  got  discouraged  and  offered  to  close 
out  at  fifty  cents  on  the  dollar.  Finally  new  management  was  put  in, 
farmers  rallied,  trade  revived,  profits  increased,  loans  were  paid  up, 
and  the  profits  exceeded  the  expenses  so  that  at  the  settlement  made 
May  1, 1890,  the  store  had  a  balance  of  $2,359.  Of  this  amount  $432 
was  put  into  a  cheese  factory  and  the  balance  was  invested  in  stock 
and  trade,  the  association  owing  no  man  a  dollar,  besides  owning  its 
building,  furniture,  organ,  scales,  etc.  In  the  year  ended  May  1, 1891, 
tlie  cash  sales  were  $6,600,  besides  considerable  charged.  "This  is  our 
weakest  point."  The  society  now  has  one  hundred  and  twenty  mem- 
bers, but  sells  alike  to  all  and  makes  prices  as  low  as  possible  instead 
of  declaring  dividends.  The  profits  from  non-members'  trade  about 
pay  operating  expenses,  while  the  profits  of  members'  trade  is  invested 
in  the  store.  Thus  non-members  pay  the  profits  out  of  their  pockets 
and  members  pay  the  profits  into  their  pockets.  The  agent,  Albion 
(iates,  is  a  practical  farmer  who  runs  a  farm  of  one  hundred  and  sixty 
acres.  He  says,  "  This  store  stands  a  fortress  between  producers  and 
non-producers  and  prevents  extortion  by  other  merchants.  Yet  many 
do  not  appreciate  its  value,  fall  to  trade  here  and  thus  help  those  who 
are  not  trying  to  help  them." 

The  Bingrham  County  (Idaho)  Farmers'  Union,  was  incorporated 
1891,  "to  carry  on  exchange  markets  for  farm  produce,  general  mer- 
chandise, stock  raising,  building,  manufacturing  and  banking."  The 
secretary,  J.  McLachlan  (Box  116,  Idaho  Falls,  Ida.),  is  an  old  hand  in 
cooperative  distribution,  having  been  librarian  for  years  of  the  Man. 
Chester  Equitable  society  at  Manchester,  England  (which  society  is  one 
of  the  oldest  and  most  successftil  in  Great  Britain,  having  12,000 
members). 

The  Foxcroft  (Me.)  Co-operative  Trading:  Company,  H.  G.  Pratt, 
agent,  was  started  in  the  'TO's  by  members  of  the  grange;  incorporated 
in  1881,  with  $1,525  capital  in  five  large  .shares,  lield  by  fifty  or  sixty 
members.  The  sales  average  $14,000  per  year,  expenses  $1,200,  and 
profits  $700,  which  are  divided  In  dividends  on  ca.sh  trade.  The  com- 
petition of  regular  stores  has  been  met  by  offering  good  goods  at  fair 
prices.  A  large  outside  trade  has  greatly  helped,  while  long  credits 
have  been  the  greatest  mistake. 

The  Lewlston  (Maine)  Co-operative  Society  No.  1,  Incorporated 
1887,  as  an  outgrowth  of  the  previous  work  of  the  Sovereigns  of  Indus- 
try (started  In  1878),  lives  up  to  the  Rochdale  system  of  quarterly 
meetings,  stock-takings  and  division  of  profits  in  dividends  on  pur- 
chases (above  resjTve  fund  and  six  per  cent  per  annum  on  capital). 
The  report  for  the  (juarter  ended  Dec.  20,  1890,  congratulates  the  mem- 
bers, as  "the  profits  of  our  business  have  been  very  good,  and  the 
amount  of  trmle  larger  than  ever  before,  and  tlie  goo<is  in  stock  are 
fresh,  clean  and  in  sulal>le  condition."  Tlie  financial  statement  war- 
rants a  dividend  of  ciglit  per  cent  on  purchases.  The  a-ssets  of  $11,741 
Include  land  and  buildings  $7,575,  fixed  stock  $655,  members'  indebt- 


318  HOW  TO  COOPERATE. 


edness  $1,292,  cash  on  hand  $432,  groceries  $1,131,  meats  $72,  boots 
and  shoes  $535,  due  for  rents  $49.  The  total  liabilities,  $9,550,  include 
bills  payable  $1,398,  share  capital  $5,954,  borrowed  money  $2,000, 
taxes  and  insurance  $112,  interest  due  $86.  The  difference  makes  a 
net  surplus  of  $2,191,  or  an  increase  of  $545  as  the  quarter's  surplus. 
The  members'  trade  for  the  quarter  amounted  to  $6,279,  non  members' 
$744,  total  $7,023,  of  which  the  grocery  sales  were  $4,968,  meat  sales 
$1,621,  and  boot  and  shoe  sales  $435.  Six  members  withdrew  and 
eight  were  added,  making  the  total  nimiber  one  hundred  and  eight, 
against  only  eight  when  the  store  was  started.  The  expenses  of  the 
quarter  were  $645 — for  wages  $361,  officials'  salaries  $21,  auditing  $5, 
stock-taking  $3,  interest  on  capital  $116,  repairs  $13,  freights  $39,  hay 
and  grain  $45,  telephone  rent  $10,  printing  $5,  water  rent  $8,  ice  $9, 
rent  of  bam  $10.  The  expenses  were  thus  only  nine  per  cent  on  the 
business  done.  The  first  nine  years  the  store  was  open  only  evenings, 
and  the  sales  have  increased  from  $1,500  to  $30,000  per  year.  The 
introductory  to  the  by-laws  says : 

"The  principal  object  of  this  society  is  to  place  within  the  power  of 
the  working  classes  the  means  to  control  their  own  labor,  thereby 
removing  the  cause  of  that  antagonism  between  capital  and  labor 
which  so  often  proves  injurious  to  our  industrial  interest.  As  a  basis 
or  foundation  for  the  future  operations  of  this  industrial  society,  we 
have  opened  a  grocery  store.  .  .  .  We  wish  it  distinctly  understood 
by  traders  and  business  men  that  it  is  not  our  intention  to  run  down 
prices  by  excessive  competition,  as  that  would  be  a  violation  of  one  of 
the  essential  principles  of  the  coiiperative  system,  because,  if  exces- 
sive competition,  by  depreciating  the  price  of  labor  products,  is  right 
in  theoi-js  on  the  same  principle  it  would  be  perfectly  right  to  depre- 
ciate labor's  wages. 

"  We  take  our  stand  in  the  market  with  the  intention  of  doing  busi- 
ness in  competition  with  others,  on  fair  and  honorable  terms,  and  shall 
sell  at  the  current  rate:  but  if  any  dealers  undertake  to  run  us  in 
prices,  they  must  not  find  fault  if  unpleasant  consequences  should  re- 
sult from  their  coming  in  competition  with  a  powerful  combination  of 
workingmen." 

Joseph  Crosly,  the  secretary,  writes :  "  Thirty  days'  credit  is  given 
only  to  the  amount  of  four-fifths  of  the  share  capital  held,  and  not  even 
as  much  credit  as  this  is  allowed  to  members  who  are  large  holders  of 
stock.  We  may  have  made  many  mistakes,  but  on  the  whole  are  well 
satisfied.  Our  strong  point  has  been  no  bad  debts,  no  shop-worn  goods, 
freshness  and  cleanliness  about  the  premises.  We  have  had  much 
competition  and  met  it  by  selling  goods  of  the  best  quality  for  small 
profits,  turning  over  many  times  each  year  our  working  capital." 

The  Tvebanon  (Ct.)  Grange  organized  the  Grange  Hall  Company 
about  1886,  and  erected  a  large  building  with  a  fine  hall  above  and  a 
store  below.  Goods  were  sold  to  all  at  the  same  price,  but  the  credit 
system  was  allowed,  difficulty  was  found  in  getting  a  man  who  would 
carry  on  the  trade  on  business  principles,  goods  were  sold  cheaper  than 
they  could  be  afforded  (for  the  sake  of  trade),  and  many  members 
cared  nothing  for  it  except  to  make  money  out  of  it.  The  sales  the 
first  year  amounted  to  $12,000,  and  $15,000  the  second  year,  at  the  end 
of  which  the  store  was  sold  out.  The  grange  is  now  thrifty,  with 
money  in  its  treasury,  and  purchases  flour,  grain,  feed  and  fertilizers 
in  car-load  lots,  making  quite  a  saving. 

The  Farmers'  Union  Store,  of  San  Jose,  California,  was  organized 
by  the  Patrons  of  Husbandry  in  1873,  capital  (150,000,  shares  $100 


OTHER    COOPERATIVE  STORES.  319 


each,  all  owned  by  the  managers.  On  a  lot  240  by  250  feet  a  fine  store 
was  put  up  and  stocked  with  everything  wanted  on  the  farm  and  in 
the  home  except  dry  and  fancy  goods.  Cash  payments,  and  the  same 
price  to  all,  but  at  lower  prices  than  others  sold  for,  enabled  the  store 
to  do  a  large  business,  paying  eight  per  cent  dividends  on  capital  eacli 
January  and  four  per  cent  more  each  July,  or  twelve  per  cent  annually, 
besides  accumulating  a  reserve  of  $18,400  and  surplus  of  $25,000.  It 
is  therefore  a  joint-stock  company  rather  than  a  cooperative  society, 
after  the  style  of  the  Civil  Service  stores  of  London.  One  large  store 
150  by  60  feet  is  used  for  groceries,  hardware,  stoves  and  tin  ware  and 
crockery.  Another  room  160  by  50  feet  is  full  of  wagons,  carriages,  har- 
ness, farm  implements  and  machinery.  Still  another  room  24  by  30 
feet  is  the  paint  and  oil  department.  Then  the  mill  and  feed  room  is 
about  60  by  30  feet ;  two  mills  run  by  an  engine  grind  feed  for  the 
farms.  A  big  cellar  is  stored  full  of  various  heavy  products,  and  the 
upper  stories  are  used  for  storage.  A  large  stable  and  yard  in  the  rear 
furnish  ample  accommodation  for  the  country  horses  as  they  daily 
come  to  town.  "All  in  all,  it  is  a  wonderful  success,  but  the  secret  of 
it  has  been  that  the  farmers  put  up  their  money  to  start  with.  Cash 
has  been  the  basis  of  it  all.  There  has  been  good  business  manage- 
ment, and  above  all  the  Patrons  have  stuck  by  one  another.  They 
would  not  be  led  off  by  other  dealers  who  for  a  time  offered  goods  at 
lower  prices."  The  sales  the  first  year  were  about  $200,000,  one-half 
spot  casli,  the  balance  credit  in  thirty  days.  The  sales  have  gradually 
increased  until  now  they  are  between  $400,000  and  $500,000  annually. 
The  ca.sh  sales  exceed  the  credit  sales  by  from  $50,000  to  $60,000. 
The  real  estate  of  the  corporation  is  valued  at  $175,000,  clear  of  all 
incumbrances.  The  number  of  employes  is  thirty  and  the  number  of 
stockholders  one  hundred  and  fifteen.  Twelve  horses  are  used  in  city 
delivery.    W.  C.  Andrews,  the  efficient  manager,  writes : 

"Our  business  is  conducted  by  business  men  on  business  principles. 
Goods  are  bought  and  sold  on  the  market.  We  buy  for  cash  in  the  oest 
markets,  and  allow  no  one  to  undersell  us,  quality  considered.  We 
keep  nothing  but  the  best  goods  and  avoid  all  job  lots  of  trash.  The 
Institution  has  a  good  name  for  square  dealing.  Tlie  principal  reason 
for  our  success  where  so  many  others  have  failed  is  tliat  we  were  more 
conservative  and,  moreover,  had  tlie  capital.  We  had  the  cash  in  hand 
with  wlilch  to  carry  on  the  business  and  did  not  overreadi  as  many  do. 
I  advise  every  cooperative  association  to  have  its  money  in  hand 
before  commencing  and  avoid  long  credits." 

The  Farmers'  Milling:  and  Elevator  Company,  of  Monte  Vista,  Rio 
Grande  County,  was  incorporated  In  1890,  with  $45,000  capital,  in 
1,800  shares  of  $25,  of  which  177  farmers  subscribed  for  1,280  shares. 
Only  80  of  these  shares  were  paid  for,  amounting  to  $2,000.  The  other 
1,200  shares,  amounting  to  $30,000,  were  paid  for  wltli  tliree  annual 
notes  of  each  subscriber,  payable  Jan.  1,  1891,  '92,  and  '93,  witli  ten 
per  cent  interest.  The  company  gave  $30,000  for  the  property,  of 
which  $7,000  was  a  first  mortgage,  the  other  $23,000  being  paid  by 
three  notes  of  the  corporation  due  March  1,  1891,  '92  and  '93.  Money 
was  borrowed  heavily  to  make  improvements  and  to  pay  for  wheat,  as 
farmers  would  not  wait  until  the  sales  of  flour  furnished  the  money  to 
pay  for  their  wheat.  The  high  price  of  wheat  this  spring  is  helping 
the  mill  out  of  its  troubles,  but  if  it  weathers  its  trials  it  will  be 
fortunate. 


320  HOW  TO   COOPERATE. 


A  private  mill,  bought  on  credit,  improved  with  borrowed  money, 
and  that  paid  for  its  wheat  with  more  borrowed  money,  could  survive 
only  by  the  best  management  and  fortunate  turn  of  the  market.  No 
cooperative  society  can  hope  or  expect  to  succeed  by  thus  violating 
every  principle  of  true  cooperation.  A  correspondent  at  Monte  Vista 
wisely  adds : 

"  I  protest  against  the  unfairness  of  compelling  stockholders  who  are 
able  and  willing  to  hold  their  grain  on  their  own  account  of  assuming 
the  responsibility  and  paying  interest  on  large  sums  of  borrowed 
money  wholly  to  assist  those  stockholders  whose  needs  may  require 
cash  in  hand.  To  most  farmers  to  realize  at  once  on  their  grain  and 
still  hold  for  reasonable  price  in  the  future,  if  they  so  desire,  a  ware- 
house under  reliable  management  in  which  to  deposit  the  grain  and 
with  the  wareliouse  receipt  obtain  such  cash  advances  as  may  meet 
necessities  seems  to  be  a  sensible  way  of  meeting  demands  of  those 
who  cannot  wait  for  slow  sales  of  products." 

The  F.  M.  B.  A.  Mercantile  Company,  of  Brazil,  Ind.,  W.  T.  Shanks, 
manager,  was  incoi-porated  as  a  stock  company  with  cooperative  in- 
stincts, March  31,  1891,  began  business  May  1  with  $25,000  capital  in 
$5  shares,  $2,500  paid  in.  Shares  are  not  transferable,  but  the  invest- 
ment of  each  accumulates  for  his  benefit,  though  no  one  can  hold  over 
ten  shares  or  haA^e  in  more  than  $1,000  of  undrawn  dividends.  "All 
goods  shall  be  bought  and  sold  for  cash,  and  semi-annual  statements 
shall  be  published.  Each  share  of  stock  is  entitled  to  one  vote,  but  the 
net  profits  (after  setting  aside  five  per  cent  for  reserve  and  a  like  sum 
for  the  contingent  fund)  shall  be  divided  in  dividends  to  stockholders, 
but  in  such  division  the  purchase  checks  of  stockholders  shall  bear 
the  same  rate  of  dividend  as  the  capital  stock ;  thus  patrons  can  get  no 
rebate  or  dividend  on  purchases  unless  they  are  stockholders.  Six  per 
cent  interest  is  allowed  upon  undrawn  dividends,  and  members  can 
withdraw  at  the  rate  of  five  dollars  per  month.  Membership  is  open 
to  all  whose  application  is  approved  by  the  directors. 

Eau  Claire,  Wisconsin,  boasts  of  the  Coc'peratlve  Mercantile  Asso- 
ciation, incorporated  Dec.  17, 1887,  with  $1,000  capital.  The  past  two 
years,  with  an  average  capital  of  $1,700,  made  $3,800  in  profits,  which 
one  hundred  and  twelve  per  cent  per  annum  on  the  average  capital 
employed,  or  an  average  saving  of  ten  per  cent  on  the  goods  consumed. 
H.  Selover,  the  secretary,  is  a  faithful  worker  for  the  true  cooperative 
system.  The  report  for  the  quarter  ended  Aug.  31, 1890,  shows  capital 
stock  to  the  amount  of  $1,995,  fees  $4,  reserve  fund  $424,  educational 
fund  $22,  Interest  $58,  dividend  $277 ;  expense  account  $157,  treasur- 
er's account  $15,  labor  account  $523,  merchandise  $1,021,  fixed  stock 
and  furniture  $696,  cash  $357,  total  $2,780.  The  receipts  during  the 
quarter  were :  for  merchandise  sold  $6,021,  shares  sold  $105,  fees  col- 
lected $2,  cash  on  hand  $292,  total  $6,420.  The  disbursements  dur- 
ing the  quarter  were:  for  expenses  $157,  labor  $524,  merchandise 
$4,859,  Interest  $31,  dividend  $408,  fixed  stock  $74,  cash  on  hand  $368, 
total  $6,420.  The  net  gain  for  the  quarter  is  $501,36,  disposed  of  as 
follows:  two  percent  to  edncational  fund,  $10;  five  per  cent  per  an- 
num Interest  on  the  capital  stock,  $25 ;  ten  per  cent  per  annum  for 
depreciation  on  fixed  stock,  $17.40 ;  seven  per  cent  dividend  on  sales, 
$425.50 ;  unexpended  balance  $27.44.    Secretary  Selover  adds : 

"We  made  a  mistake  in  not  putting  in  our  by-laws  an  ironclad  rule 
that  no  profits  or  dividends  should  oe  paid  or  withdrawn  [but  they 
must  be  declared  and  placed  to  members'  credit  to  encourage  them] 


OTHER   COOPERATIVE    STORES.  321 


from  the  business  till  the  association  had  accumulated  enough  capital 
to  carry  a  line  of  all  the  kinds  of  goods  its  members  needed.  All  coop- 
erative associations  should  adopt  this  rule  and  use  all  gain  in  trade  to 
build  up  and  enlarge  the  business.  In  paying  out  our  profits  in  divi- 
dends to  customers,  we  lost  the  golden  opportunity  to  build  up  our 
business,  and  have  made  ourselves  much  poorer  by  our  foolishness." 

In  Cowley  County,  Kansas,  the  South  Bend  Cooperative  Association 
of  the  Order  of  Patrons  of  Husbandry  organized  Aug.  16,  1879,  and 
now  located  at  Constant,  has  non-transferable  shares  of  $5  each.  It 
started  with  $180  capital,  which,  at  the  end  of  the  tenth  year,  had 
increased  to  $5,739,  of  which  only  $1,080  had  been  paid  in  in  cash. 
The  trade  was  small  the  first  two  years,  but  the  sixth  year  amounted 
to  $5,287,  the  tenth  year  to  $8,678,  and  this  year  (1891— the  eleventh) 
will  reach  nearly  $12,000.  The  members  have  not  materially  in- 
creased, being  forty-four  against  thirty-five  at  the  start,  and  expenses 
have  averaged  $475  a  year.  Cash  payments  are  insisted  upon.  Mis- 
takes were  made  by  paying  too  much  of  the  profits  back  to  the  share- 
holders, allowing  salesmen  too  much  liberty  in  the  management,  fail- 
ing to  enforce  the  directors'  orders,  and  failure  to  keep  a  strict  account 
during  the  early  years.  The  success  has  been  due  to  doing  business 
within  the  limits  of  capital,  all  trade  being  done  on  a  cash  basis  as 
nearly  as  possible,  treating  all  customers  alike  and  paying  them  a 
rebate  according  to  the  amount  of  purchases  made. 

Books  are  kept  on  the  single  entry  system,  two  efficient  employes 
carrying  on  the  business.  Quarterly  invoices  and  settlements  were 
made  the  first  five  years ;  since  then  they  have  been  semi-annual.  The 
auditor's  statement  for  the  six  months  ended  March  31,  1891,  show 
cash  on  hand  of  $276,  merchandise,  $3,522,  fixtures  $224,  buildings 
$704,  real  estate  $100,  accounts  receivable  $903,  total  $5,729.  The 
liabilities  include  341  shares,  $1,735 ;  fractional  shares  $24,  bills  paya- 
ble §266,  total  $2,024.  The  resources  over  liabilities  are  thus  $3,705, 
of  which  $536  is  the  net  gain  for  the  six  months.  The  profits  are  dj- 
vided,  giving  fifty  per  cent  to  all  customers  alike  under  the  ticket 
system,  twenty  per  cent  to  the  employes  pro  rata  as  dividend  on  their 
wages,  and  thirty  per  cent  to  reserve  fund  in  lieu  of  interest  to  share- 
holders.   R.  W.  Anderson,  the  secretary,  writes : 

"Tills  arrangement  brings  the  just  principles  of  profit-sharing  to  all 
who  come  in  contact  with  the  business.  The  first  is  the  essence  of 
cooperation,  the  second  is  a  measure  of  justice  and  progress,  and  the 
third  is  a  reform  with  points  of  advantage,— capital  is  not  placed  above 
labor  and  the  other  elements  which  earn  tlic  profits.  A  fixed  charge, 
as  interest,  becomes  at  times  a  menace  to  otlier  interests  equally  enti- 
tled to  protection.  No  element  should  be  entitled  to  profits  until  after 
the  same  are  realized.  A  store  paying  fixed  interest  on  capital  is  not 
far  different  from  a  party  doing  business  on  borrowed  capital.  The 
chief  drawbacks  to  cooperation  in  a  farming  community  like  this  is 
the  moving  propensities  of  people,  not  one-fifth  of  tlie  charter  members 
being  with  us  now.  There  Is  also  an  indifference  to  small  savings  and 
an  impatience  with  small  beginnings." 

Co-operation  Amongr  Florists.- A  practical  scheme  is  the  organiza- 
tion of  florists  in  different  cities  whereby  orders  taken  In  one  city  for 
flowers  or  arrangements  to  be  delivered  In  other  cities  were  filled  on 
telegraphic  order  by  the  member  of  the  association  doing  business 
tliere.  For  instance,  if  Mrs.  Jones,  in  Chicago,  wanted  to  send  some 
flowers  to  Mrs.  Jones,  in  New  York,  she  could  leave  her  order  with  the 
Chicago  member  of  the  association,  he  telegraphs  the  order  to  the 

n 


322  HOW  TO  COOPEEATE. 


New  York  member,  and  delivery  Is  at  once  made.  The  New  York  mem- 
ber charges  the  same  to  the  Chicago  member,  less  a  commission,  and 
the  latter,  of  course,  collects  from  the  customer.  This  association,  the 
idea  of  wliich  originated  with  Mr.  C.  B.  Whitnall,  of  Milwaukee,  now 
has  members  in  nearly  all  of  the  large  cities,  and  a  new  feature  has 
recently  been  added  in  the  form  of  a  letter  of  credit,  which  members 
may  issue  to  customers  who  are  going  to  travel.  This  is  an  order  on 
any  of  the  members  of  the  association,  good  for  a  stated  length  of  time, 
anything  delivered  on  account  of  it  to  be  charged  to  the  one  issuing  it, 
he  to  collect  for  same,  and  receive  a  commission  on  the  sales.  By  this 
means  it  is  expected  to  secure  to  the  association  the  trade  of  the  cus- 
tomers of  each  one  while  away  from  home. 

The  Farmers'  Co-operative  Union,  of  Bntte  County,  Cal.,  was  in- 
corporated April  28, 1884,  with  $25,000  authorized  capital.  The  cost 
of  the  buildings,  land,  etc.,  was  $23,000.  To  meet  this,  $10,000  was 
paid  in  on  capital  and  $10,000  borrowed  at  ten  per  cent  for  two  years 
and  then  for  eight  and  one-half  per  cent  until  the  mortgage  was  can- 
celed in  July,  1890.  The  corporation  is  now  out  of  debt  and  has  paid 
$1,760  in  dividends.  The  original  stockholders  numbered  about  fifty, 
mostly  farmers.  During  the  second  year  many  farmers  sold  their  stock 
on  account  of  an  unfounded  rumor  that  some  capitalist  was  getting  a 
controlling  interest  and  would  freeze  out  the  small  shareholders.  The 
present  number  of  shareholders  is  fourteen,  half  of  whom  are  farmers. 
The  Union  has  done  a  warehouse  storage  business  only,  making  loans 
on  the  grain  in  its  warehouse,  getting  the  money  for  the  purpose  from 
the  Grangers'  bank.  C.  M.  Brown,  of  Riggs,  is  the  superintendent  and 
secretary. 

The  Riverside  Co-operative  Association  was  incorporated  Nov.  12, 
1878,  having  been  organized  two  years  earlier  with  thirty-six  members 
and  $105  capital,  as  an  outgrowth  of  the  local  council  of  the  Sover- 
eigns of  Industry  at  Maynard,  Mass.  The  membership  has  increased 
to  370,  profits  being  paid  in  dividends  on  purchases  after  setting  aside 
one-tenth  for  the  redemption  fund.  The  number  of  $5  shares  held  by 
one  member  is  limited  to  fifty,  and  the  profits  on  non-shareholders' 
purchases  are  retained  until  they  amount  to  a  share.  Some  credit  is 
allowed  to  members  that  have  an  interest  in  the  store,  but  the  amoimt 
trusted  does  not  exceed  $1,000. 

One  mistake  was  made  in  putting  up  a  big  building  at  a  cost  of  $15,- 
000,  containing  a  public  hall  and  dining-room,  and  stores  underneath 
to  let,  besides  accommodations  for  the  coop  store,  which  does  not  pay 
as  an  investment.  Another  mistake  was  in  selling  goods  at  cost  at  the 
start,  which  caused  other  stores  to  drop  accordingly.  "After  our  build- 
ing was  up  and  our  business  increased,  our  expenses  consequently 
increased,  and  we  had  to  crawl  up  in  prices,  and  this  left  us  but  little 
room  for  dividends.  Big  dividends  always  build  up  a  big  business,  but 
can  only  be  paid  by  selling  goods  at  the  usual  retail  prices. 

"  It  will  be  noted  from  the  following  statement  of  progress  that  the 
sales  increased  $17,000  in  1883  over  the  previous  year,  owing  to  our 
takbig  on  a  meat  business  which  we  didn't  understand.  So  we  dropped 
It,  and  consequently  our  sales  fell  off  again,  and  still  further  in  1885, 
caused  by  poor  management  and  distrust  of  the  same,  which  falling 
off  was  repeated  in  1889  for  the  same  reasons.    So  you  see  how  neces- 


OTHER  COOPERATIVE    STORES. 


323 


sary  it  is  to  have  a  good  manager  to  cater  to  the  public  taste,"  writes 
Micliael  Toomey,  the  treasurer.    His  statement  follows : 


Year. 

Sales. 

Capital. 

Expenses. 

Net 

Total.      1     % 

Earnings. 

1878 

$10,674 

$1,500 

$462 

4.3 

$392 

1879 

21,111 

1,500 

1,802 

8.5 

492 

1880 

21,131 

1,500 

1,879 

8.9 

563 

1881 

24,176 

1,500 

1,873 

7.8 

808 

1882 

33,973 

8,845 

2,687 

7.9 

1,544 

1883 

50,760 

20,453 

4,551 

8.9 

2,995 

1884 

38,675 

20,094 

3,679 

9.6 

2,554 

1885 

31,671 

18,920 

3,143 

9.9 

2,137 

1886 

44,188 

22,360 

4,235 

9.6 

2,755 

1887 

57,569 

23,803 

5,156 

8.9 

5,288 

1888 

63,827 

25,733 

6,101 

9.6 

4,961 

1889 

53,816 

25,631 

6,221 

11.5 

3,804 

1890 

54,187 

25,015 

6,297 

11.6 

3,766 

Thirteen 

Tot.  $595,658 

Tot.    $48,086 

Tot.    $32,058 
Av.      $2,462 

years  

Av.    $45,819 

Av.  $15,088 

Av.      $3,699 

Av.  9.1 

To  the  Stockholders  and  Members:  The  twenty-fifth  semi-annual 
report  of  the  Riverside  Association  is  for  the  six  months  ended  June 
30,  1891.  We  liave  reduced  the  values  of  the  building  and  fixed  stock 
by  $225,  besides  putting  $64  to  the  redemption  fund,  making  $289 
whicli  is  to  tlie  benefit  of  the  stockholders,  and  consequently  have 
declared  only  two  per  cent  dividend  on  purchases.  We  would  urge 
the  members  to  leave  their  dividends  standing  to  their  credit,  as  it  is 
tlie  only  means  of  saving  something  for  a  future  exigency.  It  would 
also  help  to  build  up  a  better  business  in  the  store,  as  the  amount  of 
goods  we  caiTy  in  stock  now  leaves  but  a  small  amount  of  working 
capital,  and  we  cannot  take  tlie  advantage  of  tlie  markets  that  we 
otherwise  could.  You  will  see  by  comparing  tlie  present  report  with 
former  ones  tliat  the  liability  of  the  Corporation  to  its  members  is  less 
tlian  it  has  been  for  years,  and  yet  there  has  been  a  greater  amount  of 
business  done  with  tlie  money  Invested.  There  is  another  item  that 
we  would  like  to  call  your  attention  to :  Why  do  you  ask  for  credit  in 
your  own  store?  The  principle  of  cooperation  is  "pay  as  you  go,"  and 
if  such  was  adliered  to,  it  would  help  to  simplify  business  very  much. 
There  is  no  reason  why  you  cannot  pay  cash  on  delivery,  when  pay 
day  comes  once  a  week.  The  treasurer's  report  for  this  half  year 
follows : 


CASH  ACCOUNT. 


BECEIPTS. 

Jan.  1st, 

Cash  on  liand 

Sales,  gro.  dep't.  $25,216  83 

"  dry  goods  "         4,786  63 

Store  rents $159  48 

Hall  rents 228  60 

Insurance  rebate        16  26 

231  shares 

Members'  loan,,, 


$820  41 


$30,003  46 


388  08 

1,155  00 
996  60 


$33,378  86 


DISBURSEMENTS. 


Jan.  1st, 

Bills  payable  — 

Purchases,  gro- 
cery departm't  $19,521 

Purchases,  dry 
goods  dep't 4,270 


«811  41 


Wages 2,066 

Freight  and  Exp.  346 

Repairs 89 

Incidental  exp'n  164 


Horse  expense... 

Ga.solene  

Bags,  fixt'rs,  fuel 

Insurance  

Int.  and  dlvld'd 
Shares  and  loans 
Cash  balance  .... 


-$23,791  96 


-  2,667  61 

144  96 

112  22 

192  70 

223  75 

1,247  84 

2,186  68 

2,009  84 

133,378  86 


324 


HOW  TO  COOPERATE. 


Sundry  Expenses 

Interest 

Depreciation 

Add  to  Redemp- 
tion fund 64  58 

Two  %  dividend 
on  $18,500 370  00 


PROFIT  AND  LOSS. 

«3,290  16 
661  71 
225  00 


434  58 


$4,611  45 


Gross  profits. 


$4,611  45 


$4,611  46 


LEDGER  BALANCES. 


ASSETS. 


Real  estate $13,662  38 

Fixed  stock 1,432  98  $15,095  36 

Merchandise, 

grocery  dept..     5,878  38 
Mercliandise, 

Dry  goods  "         6,578  00-12,456  38 

Supplies  80  63 

Casli 2,009  84 


$29,642  21 


LIABILITIES. 


2,558  shares $12,790  00 

Members'  loan..     5,798  69  $18,588  69 

Note 6,000  00 

Int.  and  divid'd  866  71 

Redempt'n  fund  2,942  23 

Bills  payable.. . .  1,244  58 


$29,642  21 


The  Farmers'  Alliance  Exchanges.— Some  of  these  are  organized 
on  a  permanent  basis,  while  others  are  very  temporary  affairs,  or  sim- 
ply engagements  for  bulking  the  orders  of  the  members  of  the  alliance 
who  choose  to  patronize  the  exchange.  The  following  is  a  nearly 
complete  list  of  these  alliance  exchanges  or  alliance  State  business 
agents,  on  Sept.  15, 1891 : 

The  Dakota  Farmers'  Alliance  Company  (R.  B.  Bentley,  secretary), 
Huron,  S.  D. ;  J.  "W.  DoUison,  Rector,  Clay  County,  Ark.,  State  business 
agent;  D.  M.  Fulwilor,  155  Lake  street,  Chicago,  111.;  G.  A.  Gowan, 
Nashville,  Tenn. ;  Bexter  &  Ceylon,  Jacksonville,  Fla. ;  W.  A.  Brough- 
ton,  25  West  Hunter  street,  Atlanta,  Ga. ;  A.  E.  Sprague,  Reynoldsburg, 
O. ;  M.  L.  Donaldson,  Greenville,  S.  C. ;  Charles  M.  Rider,  Sardinia, 
N.  Y.;  Maj.  A.  R.  Venable,  Jr.,  Box  337,  Richmond,  Va. ;  W.  H.  Worth, 
Raleigh,  N.  C. ;  George  H.  Johnson,  Romney,  W.  Va. ;  J.  H.  Brammeier, 
Alamosa,  Colo. ;  T.  N.  Clayton,  New  Orleans,  La. ;  The  Caltfomia  F.  A. 
&  I.  U.  Agency,  12-14  Front  street,  San  Francisco,  Cal.  (J.  M.  Moore, 
agent);  Farmers'  Alliance  Exchange,  of  Kentucky  (W.  W.  Holland), 
336  West  Main  street,  Louisville,  Ky. ;  The  Wisconsin  Alliance  Pur- 
chasing Agency,  P.  F.  Newell,  treasurer.  Star  Prairie,  Wis. ;  E.  R.  Duvall, 
Mnlhall,  Logan  County,  Okla  T. ;  B.  G.  West,  224  Fruit  street,  Memphis, 
Tenn. ;  H.  C.  Demming,  Uarrisburg,  Pa, 


Co-operative  Fire  Insurance. 

[See  also  pages  159-177,  305-310.] 

HELPFUL  HINTS. 

Pratt's  system  of  classification  of  rislc s  includes  a  full  line  of  blanks 
and  instructions,  also  registry  books  for  policies,  etc.,  indispensable  to 
all  who  would  start  or  operate  a  cooperative  insurance  company; 
George  L.  Pratt,  Ridgeway,  N.  Y,  An  excellent  index  to  policy  registers 
is  made  by  Brown,  Smith  &  Co.  of  Kansas  City,  Mo. 

The  reports  State  Central  Organization  of  Cooperative  Insurance 
Companies  of  New  York,  obtainable  from  the  secretary,  C.  W.  Gifford  of 
Jamestown,  N.  Y.,  will  be  very  valuable.  Also  the  special  reports  on 
farm  mutuals  and  the  model  laws  governing  tlie  same  published  by 
the  State  Insurance  Department,  Lansing,  Mich.,  price  25c. 

NAMES  AND  ADDRESSES  OF  MUTUAL  FIRE  INSURANCE  COMPANIES. 

Maine  :— Harrison  Mutual  of  Harrison ;  Dresden  Mutual  of  Dresden ; 
"Warren  Mutual  of  Warren;  Cumberland  Mutual  of  Cumberland; 
AVoolwich  Mutual  of  "Woolwich;  Harpswell  Mutual  of  Harpswell; 
Patrons'  Androscoggin  Mutual  of  East  Auburn;  Jay  Mutual  of  Jay; 
Piscataquis  Mutual  of  Dover;  Oxford  County  Patrons  of  Husbandry 
Mutual  of  South  Paris;  Fayette  Mutual  of  Fayette;  North  Yarmouth 
Mutual  of  North  Yarmouth. 

New  Jersey:— American  Mutual  of  Plainfleld;  Bergen  Co.  Farmers' 
Mutual  of  Spring  Valley;  Bound  Brook  Mutual  of  Bound  Brook; 
Burlington  County  of  Medford;  Cumberland  Mutual  of  Bridgeton; 
Elizabeth  Mutual  of  Elizabeth;  Essex  County  Mutual  of  Bloomfleld; 
Farmers'  Mutual  of  Readington ;  Farmers*  Mutual  of  Salem;  Hacketts- 
town  Mutual  of  Hackettstown ;  Hillsboro  Mutual  of  Neshanic;  Mercer 
County  Mutual  of  Pennington;  Monmouth  County  Mutual  of  Freehold; 
Morris  County  Mutual  of  Morristown ;  Patrons'  Mutual  of  Hamilton 
Square;  Salem  County  Mutual  of  Salem;  Sussex  County  Mutual  of 
Newton. 

OHIO:— Allen  County  Mutual  Relief  of  Lima;  Ashland  County  Patrons' 
Mutual  of  Ashland;  Brady  Township  of  West  Unity;  Brown  Township 
of  Malvern;  Clarke  County  Farmers'  Mutual  Protection  and  Aid  of 
Springfield;  Crawford  County  Farmers'  Mutual  of  Bucyrus;  Edinburg 
Farmers'  Mutual  Protection  of  E<linburg;  Erie  County  Farmers'  Mutual 
of  Sandusky;  Farmers'  Home  Mutual  of  New  Knoxville;  Farmers' 
Mutual  Relief  of  Wyandot  County,  Upper  Sandusky;  Farmers'  Mutual 
of  Dayton;  Farmers'  Mutual  of  Farmer  Post-Offlce;  Farmers'  Mutual 
Home  of  Medina;  Farmers'  Mutual  Aid  of  Leslie;  Farmers'  Mutual 
Relief  of  Fremont;  Farmers'  Mutual  of  New  Berlin;  Farmers'  Mutual 
Fire  and  Lightning  of  Whittlesey;  Farmers'  Mutual  of  Thompson; 
Fulton  County  Farmers'  Mutual  and  Aid  of  Wauseon;  Miami  Farmers' 
of  Troy;  Minster  Mutual  of  Minster. 

MICHIGAN: — Farmers'  Mutual  Fire  Insurance  Co.  of  Allcg.in  and 
Ottawa  Counties,   Allegan ;    Farmers'   Mutual   of    Barry  and  Eaton 

325 


326  HOW  TO   COOPERATE. 


Comities,  Hastings;  Farmers'  Mutual  of  Kalkaska,  Missaukee  and 
AVexfoi-ii  Counties,  South  Boardman;  Farmers'  Mutual  of  Lenawee 
County,  Adrian;  Citizens'  Mutual  of  Callioun  County,  Marsliall; 
Concordia  Mutual,  Frankenlust;  Eastern  Jackson  Farmers'  Mutual, 
(irassLake;  Farmers'  Mutual  of  Berrien  and  Cass  Counties,  Buchanan ; 
Farmers'  Mutual  of  Branch  County,  Coldwater;  Farmers'  Mutual  of 
Callioun  County,  Marengo;  Farmers'  Mutual  of  Cass  County,  Dowagiac ; 
Farmers'  Mutual  of  Clinton  County,  St.  Johns;  Farmers'  Mutual  of 
Grand  Traverse,  Antrim  and  Leelanaw  Counties,  Traverse  City ;  Farmers' 
Mutual  of  Ingraham  County,  Mason;  Farmers'  Mutual  of  Ionia  County, 
Ionia; 

PENNSYLVANIA:— Cool  Spring  Valley  Mutual  of  Cool  Spring,  Mercer 
Co;  Farmers'  Mutual  of  Tuscarora,  Schuylkill  Co;  Dauphin  County 
Mutual  of  Linglestown;  Goschenlioppen  Mutual  of  Pennsburg,  Mont- 
gomery Co;  Farmers'  Mutual  of  Lancaster;  Cumberland  Valley  Farmers' 
Mutual  of  Middle  Spring;  Farmers'  Mutual,  Harbor  Creek,  Erie  Co; 
Farmers"  Union  Mutual  of  Trexlertown,  Lehigh  Co;  Centennial  Mutual 
of  Sliippensburg,  Cumberland  Co;  Mt.  Joy  Township  Mutual  of 
Elizabethtown,  Lancaster  Co;  Buffalo  Valley  Farmers'  Mutual  of 
Lewisburg,  Union  Co;  Farmers'  and  Mechanics'  Mutual  of  Elliottsburg, 
Perry  Co;  Danville  Mutual  of  Danville,  Montour  Co;  Farmers'  Mutual 
of  York ;  Farmers'  Mutual  of  Kremis,  Mercer  Co ;  Patrons'  Mutual  of 
Indiana,  Indiana  Co;  Farmers'  Mutual  of  McCandless  Township, 
Perrysville,  Allegheny  Co. 

New  York;— New  Scotland  Mutual  Insurance  Co.  of  New  Salem; 
Farmers'  Cooperative  Insurance  Co.  of  Angelica;  Broome  County  P.  F. 
R.  A.  of  Binghamton;  Canaan  Mutual  F.  I.  Co.  of  Canaan  Center; 
Chautauqua  County  P.  F.  R.  A.  of  Jamestown;  Cooperative  Fanners' 
F.  R.  A.  of  Randolph;  Farmers'  Reliance  of  Chemung,  Schuyler  and 
Yates  Counties,  Penn  Yan;  Courtland  County  P.  F.  R.  A.  Hunt's 
Comers;  Venice  Town  Insurance  Co.  of  Genoa;  Farmers'  Mutual  of 
Rliinebeck  County,  Rhinebeck;  Delhi  Insurance  Co.  of  Delhi;  Erie  and 
Niagara  Farmers'  Insurance  Association  of  Swormville;  Jefferson 
County  Mutual  F.  I.  Co.  of  Watertown;  Livingston  County  Mutual 
F.  I.  Co.  of  Scottsburg;  Farmers'  Fire  Insurance  Co.  of  Danube  Minden. 

Iowa:— Boone  Valley  Mutual  of  Webster  City;  Brown  Townsliip 
Mutual,  SpringvilJe;  Chickasaw  County  Farmers'  Mutual  of  New  Hamp- 
ton; De  Moines  County  Farmers'  Mutual  of  Burlington;  Farmers' 
Mutual  of  Dundee ;  Farmers'  Mutual  of  Chariton ;  Fanners'  Mutual  Aid 
of  Garwin;  Farmers'  Mutual  of  Kalo;  Farmers'  Mutual  of  Sweetland; 
Farmers'  Mutual  Aid  Association  of  Preston;  German  Mutual  of 
Denver;  Norwegian  Mutual  Protection  Association  of  Decorah;  Prairie 
Farmers'  Mutual  of  Coal  Creek;  Scandinavian  Mutual  of  Pilot  Mound; 
Swede  Mutual  of  Madrid;  Swedish  Mutual  of  Des  Moines;  Walcott 
Mutual  of  Walcott;  Western  Cherokee  Mutual  of  Marcus;  White  Pigeon 
of  Wilton;  Iowa  Mutual  Tornado,  Cyclone  and  Wind  of  West  Union; 
Merchants'  and  Manufacturers'  of  Clinton. 

AVISCONSIN :— Alden  and  Black  Brook  Mutual  Fire  of  Little  Falls; 
Albion  Mutual  Fire  of  Edgerton;  Brighton  Mutual  Fire  Insurance  Co. 
of  Salem;  Bohemian  Mutual  Farmers'  of  Keilnersville;  Berlin  F.  M.  F. 
and  Liglitning  of  Berlin;  Burnett  Mutual  Insurance  Co.  of  Beaver  Dam; 
Bloomfleld  Insurance  Co.  of  West  Bloomfield;  Columbus  Mutual  Fire 
Insurance  Co.  of  Fall  River;  Concord  Fire  Insurance  Co.  of  Concord; 


COOPERATIVE  FIRE  INSURANCE.  327 

Calumet  Mutual  Fire  of  New  Holstein;  Dupont  F.  31.  Insurance  Co. 
of  Marlon;  Ettrick  Sean.  Insurance  Co.  of  Ettrick;  Farmers'  Mutual 
Insurance  Co.  of  Durand ;  Farmers'  Mutual  Insurance  Co.  of  Millard ; 
Fond  du  Lac  Empire  and  Friendship  of  Fond  du  Lac;  Farmers'  Mutual 
Fire  Insurance  Co.  of  Monroe;  Farmers'  Mutual  Fire  Insurance  Co.  of 
Waterford;  Farmers'  Mutual  Fire  Insurance  Co.  of  Tomah;  Henrietta 
Greenwood  Union  of  Yuba;  Hustisford  Farmers' Mutual  Fire  Insurance 
Co.  of  Hustisford. 

Illinois :— Algonquin  Mutual  F.  I.  Co.  of  Algonquin;  Millbum 
Insurance  Co.  of  Millbum;  Mutual  Township  Insurance  Co.,  Shumway, 
Monmouth  Farmers'  I.  N.  S.  Co.  of  Monmouth;  Belleville  Farmers' 
Mutual  F.  I.  Co.  of  Belleville;  Farmers'  Mutual  Insurance  Co.  of  Guil- 
ford; Allen  and  Otter  Creek  Mutual  Insurance  Co.  of  Sunrise;  Farmers' 
Mutual  Fire  of  Palmyra,  Dixon ;  German  Mutual  Fire,  45  Eugenie  St., 
Chicago;  Clinton  Mutual  of  Clinton;  Delavan  Mutual  of  Delavan; 
Peoria  County  Grange  of  Alta;  Appanoose  and  Sonora  of  Nauvoo;  Belle 
Prairie  Farmers'  of  Fairbury ;  BuffaloMutual  of  Polo ;  Ellington  Farmei-s' 
of  Quincy;  Hanover  and  Wayne  of  Elgin;  La  Prairie  of  Camp  Grove; 
Mount  Pleasant  of  Morrison. 

Minnesota  :— Farmers'  Mutual  ot  New  Sweden,  Norseland;  Otisco 
Farmers'  Mutual  Insurance  Co.  of  Otisco;  Farmers*  Mutual  of  Harmony 
Harmony ;  Patrons'  Cooperative  F.  I.  Co.  of  Anoka,  Ramsej ,  and 
Hennepin  Counties,  Richfield;  Shelby  Farmers'  Mutual  of  Amboy; 
St.  Joseph  Mutual  of  the  Towns  of  St.  Joseph,  St.  Cloud,  Le  Sauk  and 
St.  Wendel,  St.  Joseph ;  Town  of  Sumter  Fire  Insurance  Association, 
of  Biscay ;  Wilmington  Fire  Insurance  Co.  of  Wilmington ;  Holden  and 
Wheeling  Mutual  Fire  Insurance  Co.  of  Nerstrand;  Rochester  Farmers' 
Mutual  Co.  of  Rochester;  Austin  Farmers'  Fire  and  Storm  Mutual  of 
Dexter;  Beaver  Creek  Mutual  of  Beaver  Creek;  Austin  Farmers' 
Mutual  of  Austin;  Sumter  Mutual  of  Sumter;  Wilmington  Mutual  of 
Spring  Grove. 

Miscellaneous:— The  Husbandmen's  Insurance  Co.  of  Hardwick 
Vt.  The  Mass.  Patrons'  Mutual  of  Medfield,  Mass.  Texas  Mutual  P.  of 
H.  of  Galveston,  Texas.  Farmers'  Union  of  Plumb  Creek,  Neb. 
Arkansas  Valley  of  Wichita,  Kan.  Mennonite  Mutual  of  Halstead, 
Kan.,  while  although  Incorporated  In  1880  is  a  direct  offspring  of  the 
Tlegenholl  Fire  Insurance  Association  of  Prussia— over  200  yeai-sold; 
and  we  especially  commend  the  experience  of  tliis  thrifty  Mennonite 
Company  to  beginners.  Patrons'  Mutual  of  Meriden,  Ct;  Fanners' 
Mutual  of  South  Bend,  Ind;  P.  of  H.  Mutual  Insurance  Co.  of  Greens- 
burg,  Ind.  Lower  Columbia  Fire  Relief  Association  of  Washougal, 
Washington. 

LXVE  STOCK  INSURANCE  COMPANIES. 

The  Central  Nebraska  Live  Stock  Insurance  Co.,  Kearney,  Neb. 
American  Horse  Owners'  Protective  A8.soclatlon,  Toledo,  O.  Cleveland 
Mutual  Live  Stock  Association,  Cleveland,  O.  Berks  County  Live 
Stock,  Reading,  Pa.  Dauphin  County  Live  Stock,  Millersburgh  Pa. 
Farmers'  and  Breeders'  Live  Stock,  Butler,  Pa.  Farmers'  Live  Stock, 
Jackson  Center,  Pa.  Globe  Live  Stock  Sprlngtown,  Pa.  Harrlsburgh 
Live  Stock,  Harriaburgh,  Pa.  Jefferson  County  Live  Stock,  Reynolds- 
vUle,  Pa,    Lancaster  County  Live  Stock,  Columbia,  Pa.     National  Live 


HOW  TO   COOPERATE. 


Stock,  Mount  Union,  Pa.  Pennsburg  Horse,  Pennsburg,  Pa.  People's 
Live  Stock,  Philadelphia,  Pa.  Trumbauersville  Horse,  Trunibaiiers- 
ville.  Pa.  Tylersport  Live  Stock,  Tylersport,  Pa.  Union  County  Live 
Stock,  Mlffliuburg,  Pa. 


Co-operative  Dairying. 

[See  also  Pages  143-158.] 
Co-operative  Creameries. 

By  addressing  the  "  Cooperative  Creamery  Association "  at  each  of 
the  postofflces  named  below,  the  reader  will  be  put  into  communication 
with  many  successful  efforts  of  this  kind  : 

Massachusetts  ;— Amherst,  North  Brookfleld,  Northfleld,  Ipswich, 
South  Egremont,  Hinsdale,  Phillipston,  Rutland,  Shelbume  Falls, 
Conway,  West  Dudley,  Ashby,  Northampton,  West  Millbury,  Cumming- 
ton,  New  Boston,  Wellesley  Hills,  Easthampton,  Monterey,  Wilbraham, 
Granby,  Bridgewater,  Belchertown,  Ashfield,  Uxbridge,  Lee,  Millbury. 

Connecticut  :—Wapping,  Canton  Center,  Simsbury,  East  Granby, 
Lanesville,  Northville,  Plainville,  (Pomfret  Landing,  Wethersfield, 
West  Hartford,  Lebanon,  Avon,  Ellington,  West  Goshen,  MeiTow, 
Windsor,  Glastonbury,  Colchester,  Chapinville,  Andover,  Wallingford, 
Cromwell,  Newton,  Cheshire,  Eastford,  Brooklyn,  Somers,  Banksville, 
Southington,  Suffleld,  New  Canaan,  Putnam,  Rockville,  Goodspeed's 
Landing,  Jewett  City,  Woodstock,  Warehouse  Point,  Ridgefield,  East 
Hampton,  Cornwall,  Monroe,  North  Stonington,  Riverton,  Black  Hall, 
Berlin,  Granby,  Green's  Farms,  Farmington. 

Vermont  :— Sudbury,  West  Brattleboro,  Jacksonville,  Wilmington, 
Felchville,  Westminster,  Springfield,  Glover,  Barton  Landing,  Ben- 
nington, Woodstock,  Sharon. 

Maine  :—Sebattu8,  Winthrop,  Turner  Center,  Skowhegan,  Foxcroft, 
West  Paris,  Acton,  Button's  Mills,  Buckfleld,  Fayette,  Springvale. 
Clinton,  Rockland,  Rumford,  Poland,  Garland,  East  Lebtiuon,  Bangor. 

New  Hampshire  :— Franklin,  Peterboro,  Goshen,  Henniker,  East 
Washington,  Durham,  Keene,  Grantham,  Littleton,  New  Boston,  Clare- 
mont,  Freedom,  Wolfboro  Junction,  Cornish,  East  Haverhill,  Haverliill, 
North  Haverhill,  Lebanon,  Wakefield,  Lyme,  Piermont,  Sandwich, 
West  Canaan,  West  Lebanon. 

New  York  :— Friendship,  Moreland,  Coldwater  Creamery  at  Kennedy, 
Davenport,  A'alley  Creamery  at  Smith's  Basin,  Poughkeepsie,  Glens 
Falls,  Chatham,  Putnam,  Salt  Point,  Schuylerville,  Shushan,  Hopewell 
Junction,  Windham,  Watkins,  Cazenovia,  Eagle  Mills,  Upper  Red 
Hook,  Smjrma. 

Rhode  Island:— Hope  Valley,  Wakefield,  Moosup  Valley,  South 
Foster,  Newport. 

Pennsylvania  :— Austinville.  Lemont,  Leraysville,  Troy,  Spring  Mills 
Cooperstown,  Lower  Windsor,  Mercersburg,  Meyersdale,  Huntingdon) 
South  Gibson,  Newfoundland,  Somerset,  Bodines  Station,  Williamson, 


COOPERATIVE   DAIRTIKG.  329 

Solebury  (Albert  Preston,  Sec),  Buckingham  (T.  Howard  Atkinson,  Sec.) 
Buckmanville  (J.  D.  Williams,  Sec.) 

Iowa  :— State  Center,  West  Union,  Republic,  Columbia  City,  Farley. 

Wisconsin  :— Berlin,  Somers,  Trempeleau,  West  Salem,  Jonesvllle, 
Sumpter  of  Prairie  du  Sac,  Sauk  City,  Merrimack,  Crystal  Lake  of 
Lodi. 

Nebraska  :— Lyons. 

Michigan  :— The  only  cooperative  creamery  in  this  State  is  at  Flint, 
S.  J.  Wilson,  Manager. 

Minnesota  :— Oslo,  Wall  Lake,  RovmdLake,  Arcade  Creamery  Associ- 
ation  at  St.  Cloud. 

Missouri  :— Martinsburg,  Dawn. 

Ohio  :— Sharion,  Bellevue,  Leetonia,  West  Salem,  Gallon,  Lexington, 
(W.  W.  Coekley,  Manager.) 

Illinois  :— Naperville,  Dakota,  Hooppole,  Aurora,  Sparta. 

Cheese  Factobies. 

Maine  :—Nicker8on  cheese  factory  at  Houlton;  Winthrop  creamery 
at  Winthrop;  R.  D.  Leavitt,  North  Turner;  Saugerville  cheese  factory, 
Saugerville ;  B.  Turner,  Leeds. 

Vermont  :— Castleton  cheese  co.  of  Castleton ;  Egal  cheese  factory  of 
Cavendish ;  Chester  cheese  co.  of  North  Chester ;  R.  R.  Earle  of  Chester ; 
N.  M.  Powers  of  Clarendon ;  W.  W.  Jenks  of  North  Clarendon ;  Grafton 
Cheese  Co.  of  Grafton ;  Valley  cheese  factory  of  Hinesburg ;  George  W. 
Curtis  of  Ira;  Manchester  cheese  factory  association  of  Manchester 
Center ;  Henry  Lord  of  Mount  Holly ;  A.  W.  Crawley  of  Mount  Holly ; 
William  Hoskinson  of  Mount  Holly ;  M.  Tarbell  of  Mount  Holly ;  Frank 
Blakeley  of  Pawlet ;  William  Leach  of  Pawlet ;  Carl  Marks  of  Pawlet ; 
East  Poultney  cheese  factory  co.  of  East  Poultney;  C.  Hadwin  of 
Rockingham ;  R.  O.  Hadwin  of  Rockingham ;  Billings  cheese  factory  of 
Rutland ;  Greene  cheese  factory  of  Rutland ;  H.  C.  Gleason  of  Shrews- 
bury ;  L.  A.  Russell  of  Shrewsbury ;  Gleason  &  Wilcox  of  Shrewsbury ; 
Bates  cheese  factory  of  Cuttingsville ;  W.  E.  Aldrich  of  Cuttingsville ; 
Smith  Town  cheese  factory  of  West  Rutland. 

New  York :— Old  Manhelm  cheese  factory  of  Little  Falls;  Fairfield 
dairy  association  of  Little  Falls ;  Eatonville  cheese  factory  of  Little 
Falls;  Manhelm  Turnpike  association  of  Little  Falls;  Sneilsbush 
factory  of  Little  Falls ;  Burt  Grove  factory  of  Little  Falls ;  Danube  Cold 
Spring  factory  of  Little  Falls ;  Cross  Roads  cheesa  factory  of  Johnstown ; 
South  Columbia  factory  of  South  Columbia;  East  Creek  factory  of  East 
Creek ;  Flat  Creek  factory  of  Sprakers ;  Fort  Willett  cheese  factory  of 
St.  Johnsville ;  Ives  &  Eaton  factory  of  Salisbury ;  Johnstown  cheese 
factory  of  Johnstown;  State  Hill  factory  of  Ephratah;  St.  Johnsville 
factory  of  St.  Johnsville;  Spraker's  cheese  factory  of  Sprakers;  Sneils- 
bush cheese  factory  of  East  Creek ;  Smith  Creek  factory  of  Fort  Plain ; 
Fairfield  Dairy  Central  factory  of  Mlddleville. 

Ohio:— Tlie  Lexington  Butter  and  Cheese  Manufacturing  Co.  of 
Lexington. 

MICHIGAN:— Ann  Arbor  cheese  factory  of  Ann  Arbor;  Clayton  cheese 
and  butter  company  of  Clayton  ;  Birch  Run  clieese  company  of  Birch 
Run  ;  Dowlngton  cheese  company  of  Dowlngton ;  JuddvUle  butter  and 
cheese  company  of  JuddvUle;  Lynn  cheese  manufacturing  company 
of  Lynn;  Cheese  and  butter  association  of  RawsonvUle;  RichvlUe 


330  HOW  TO   COOPERATE. 


cheese  company  of  Richville;  Oneida  cheese  company  of  River  Bend; 
£ast  Huron  cheese  company  of  Sand  Beach. 

Missouri: — Cooperative  butter  and  cheese  association  of  Lamonte, 
New  Haven,  (J.  M.  Davis,  Manager);  Shell  City,  Bolivar,  Prairie  City, 
(S.  W.  Sunderworth,  Manager);  Carthage,  Tarkio,  (J.  H.  Laughlin, 
Manager) ;  Verona,  (August  Smith,  Manager.) 


Co-operative  Banks  or  Building  Associations. 

[See  also  Pages  178-206.] 

Massachusetts — Amesbury  co;  perative  bank,  Amesbury,  George  E. 
Gale,  secretary;  Boston  cooperative  bank,  Boston,  Eugene  M.  Smith, 
secretary ;  Cambridge  cooperative  bank,  Cambridge,  John  H.  Pouce, 
secretary;  South  Framingham  cooperative  bank.  South  Framingham, 
H.  L.  Davenport,  secretary ;  Germania  cooperative  bank,  Boston,  An- 
drew M.  Dorr,  secretary ;  Franklin  cocperative  bank,  Franklin,  H.  E. 
Ruggles,  secretary ;  Fitchburg  cooperative  bank,  Fitchburg,  Joseph  F. 
Simonds,  secretary;  Gardner  cooperative  bank,  Gardner,  James  A. 
Stiles,  secretary ;  Fall  River  cooperative  bank.  Fall  River,  George  E. 
Lathrop,  secretary;  Equity  cooperative  bank,  Worcester,  T.  J.  Hastings, 
secretary;  Equitable  cooperative  bank,  Lynn,  Thomas  CoUyer,  Jr., 
secretary. 

New  Jeksey  Building  and  Loan  Associations— Bordentown,  William 
H.  Wilson,  secretary;  Camden  City,  S.  E.  Fry,  secretary;  Franklin,  E. 
K.  Tartiner,  secretary;  Cape  May  City,  N.  C.  Price,  secretary;  Belle- 
ville, R.  P.  Scaine,  secretary ;  Mutual  building  and  loan  association, 
Newark,  John  Pardine,  secretary;  Clarksboro,  J.  H.  Lamb,  secretary; 
People's  B.  &  L.  A.,  Harrison,  J.  A.  Riordan,  secretary ;  Greenville  B.  & 
L.  A.,  Jersey  City,  R.  Routh,  secretary ;  Mechanics'  of  Trenton,  P.  W. 
Crozer,  secretary ;  Salem,  D.  W.  Bullock,  secretary  ;  Harmonia,  of  Eliza- 
beth, R.  Gerke,  secretary;  Phillipsburg  No.  4,  PhilJipsburg,  S.  C.  Smith, 
secretary. 

Ohio— In  Cincinnati  the  following  are  a  few  of  the  most  successful : 
Tlie  Cincinnati  Turners'  and  Builders'  Association,  The  Brighton  Build 
ers'  Association,  Tlie  Great  Western  Builders'  Association,  the  Big  Four 
Building  and  Savings  Company,  the  Business  Men's  Building  Association 
and  Loan  Company,  the  City  and  Suburban  Building  Association  and 
Loan  Company,  the  Consolidated  Building  and  Savings  Company,  the 
Elmont  Building  and  Saving  Company,  the  Emperor  Building  and  Loan 
Company,  the  Equality  Building  Association  Company,  the  Excellent 
Loan  and  Building  Association  Company,  the  Progress  Loan  and  Build- 
ing Company,  the  Fifth  Ward  Builders'  Association,  tlie  Grand  Cen- 
tral Builders'  Association,  the  Grand  Union  Builders'  Association,  the 
Lafayette  Builders'  Association,  the  Landwehr  Building  and  Saving 
Company,  the  Mutual  Home  Building  and  Saving  Company,  the  Na- 
tional Building  Association  Company,  the  Queen  City  Building  and 
Loan  Company,  the  Royal  Building  and  Loan  Company,  the  Seven- 
teenth Ward  Building  and  Loan  Company,  the  New  York  Street  Build- 


BANK  OB  BUILDING  ASSOCIATIONS.  331 


ing  Company,  the  Young  Men's  Building  and  Loan  Company,  the  West- 
wood  Avenue  Building  and  Saving  Company.  Other  business  associa- 
tions of  Ohio  are  the  Scioto  Builders' Association,  of  Circleville;  the 
Cooperative  Loan,  Building  and  Savings  Association,  of  Oxford ;  the 
Clinton  Building  and  Loan  Association,  of  Columbus;  the  Quincy 
Building  and  Loan  Association,  of  Quincy. 

Minnesota — Continental  Savings,  Loan  and  Building  Company,  of 
St.  Paul;  Guaranty  Building  and  Loan  Association,  of  Minneapolis; 
Home  Savings  and  Loan  Association,  of  Minneapolis ;  Minnesota  and 
Dakota  Building  and  Loan  Association,  of  Minneapolis;  Minnesota 
Saving  Fund  and  Investment  Company,  of  Minneapolis;  Northwestern 
Loan  and  Building  Association,  of  Minneapolis ;  People's  Building  and 
Loan  Association, of  Minneapolis;  Railway  Building  and  Loan  Associa- 
tion, of  Minneapolis;  Security  Building  and  Loan  Association,  of 
Minneapolis. 

New  York  City— American  Savings  and  Loan  Association,  Assured 
Building  and  Loan  Association,  Bank  Clerks'  Building  and  Loan  Asso- 
ciation, Citizens'  Savings  and  Loan  Association,  Dry  Goods  Cooperative 
Building  and  Loan  Association,  Daily  News  Building,  Savings  and 
Loan  Association,  East  Side  Building  and  Loan  Association,  Eureka 
Cooperative  Savings  and  Loan  Association,  Equitable  Cooperative 
Building  and  Loan  Association,  Federal  Cooperative  Building  and 
Loan  Association,  Fordbam  Cooperative  Building  and  Loan  Associa- 
tion, Fraternity  Cooperative  Building  and  Loan  Association,  German- 
American  Building  and  Loan  Association,  Greenwich  Building  and 
Loan  Association,  Home  Mutual  Building  and  Loan  Association,  Har- 
em Cooperative  Building  and  Loan  Association,  Herald  Employes' 
Cooperative  Building  and  Loan  Association,  Industrial  Cooperative 
Building  and  Loan  Associaton,  Jewelers'  Building  and  Loan  Associa- 
tion, Mount  Morris  Cooperative  Building  and  Loan  Association,  Milli- 
nery Building  and  Loan  Association,  Model  Building  and  Loan  Associa- 
tion of  Mott  Haven,  Metropolitan  Cooperative  Building  and  Loan  Asso- 
ciation, Mount  St.  "Vincent  Building  and  Loan  Association,  Murray  Hill 
Cooperative  Building  and  Loan  Association,  Manhattan  Mutual  Coop- 
eration Savings  and  Loan  Association,  New  York  World  Cooperative 
Building  and  Loan  Association,  New  York  City  Cooperative  Savings 
and  Loan  Association. 

Pennsylvania— In  Philadelphia,  a  few  of  the  most  successful  are : 
Tlie  City  of  Homes  Building  and  Loan  Association,  Gurney  Building 
and  Loan  Association,  Ben  Franklin  Building  and  Loan  Association! 
Royal  Building  and  Loan  Association,  Ritner  Building  and  Loan  Asso- 
ciation, Economy  Building  and  Loan  Association,  Belrose  Building 
and  Loan  Association,  Second  Street  Marks  Building  and  Loan  Asso- 
ciation, Safeguard  Building  and  Loan  Association,  Prospect  Building 
and  lAtRn  Association,  Concord  Building  and  Loan  Association,  f^>)lar 
Hiiiltiing  and  rx)an  Association,  West  Park  Avenue  Building  and  Loan 
Association,  Model  Building  and  Loan  Association.  Ridley  Building 
and  T,oan  Association,  Second  (Jerman  Soutlieastern  Building  Associa- 
tion, Third  German  Central  Building  Association,  Consolidation  Build- 
ing Association,  Delaware  Building  Association,  tlie  Invincible  Build- 
ing and  I>oan  Association,  the  Atlas  Building  and  I>oan  Association, 
the  Northwest  Building  and  Loan  Association,  the  East  Park  Building 
and  Loan  Association. 


332  HOW  TO   COOPEBATE. 


Notes — See  Bibliography  for  list  of  newspapers,  etc.,  on  this  depart- 
ment of  cooperation.  Blanks,  books  and  other  supplies  for  cooperative 
banks  are  a  specialty  with  Thomas  Galtney,  1414  South  street,  Spangler 
&  Davis,  629  Commerce  street,  Philadelphia,  Pa. 


Directory  of  Women's  Exchange. 

[See  Pages  241-252.] 

In  this  list,  it  is  only  necessary  to  address  "  The  "Women's  Exchange" 
at  each  address  given,  though  where  the  name  of  the  exchange  is 
different  from  this  title  it  is  printed  In  full. 

Arkansas,  Little  Rock,  121  Main  street.  California,  Los  Angeles, 
Woman's  Industrial  Exchange,  125  East  4:th  street ;  San  Diego,  Woman's 
Industrial  Exchange,  939  Sixth  street ;  San  Francisco,  116  Sutter  street ; 
Santa  Barbara,  Woman's  Industrial  Exchange,  729  State  street. 
Connecticut,  Bridgeport  Exchange  for  Woman's  Work,  24  P.  O. 
Arcade ;  Hartford,  United  Workers  and  Woman's  Exchange,  49  Pearl 
street;  Stamford,  Exchange  for  Woman's  Work,  9  Atlantic  street; 
Waterbury,  149  Bank  street.  Washington,  609  13th  street,  N.  W. 
Georgia,  Augusta,  309  Mcintosh  street.  Illinois,  Chicago,  Exchange  for 
Woman's  Work,  209  Wabash  avenue;  Decatur,  North  Park  street; 
Jacksonville,  317  West  State  street ;  Springfield,  227  South  5th  street. 
Kansas,  Woman's  Industrial  Exchange,  Corner  Sixth  street  and  Kansas 
avenue;  Topeka,  Ladies'  Exchance,  119  West  Sixth  avenue;  Wichita, 
243  North  Main  street. 

Kentucky,  Lexington,  42  North  Upper  street  ;'Louisiana,  New  Orleans, 
Christian  Woman's  Exchange,  South  and  Camp  streets.  Maryland, 
Baltimore,  Woman's  Industrial  Exchange,  331  North  Charles  street. 
Massachusetts,  Amherst;  Boston,  Woman's  Educational  and  Industrial 
Union,  98  Boylston  street;  New  Bedford,  Depository  of  the  Union  for 
Good  Works,  6  Purchase  street :  Northampton,  Exchange  for  Woman's 
Work,  3  Main  street;  Worcester  Woman's  Employment  Society,  5 
Forest  avenue.  Michigan,  Detroit,  Exchange  for  Woman's  Work, 
12  Grand  River  avenue.  Minnesota,  Duluth,  Woman's  Work  Exchange, 
323  Superior  street;  St.  Paul,  Woman's  Work  Exchange,  Endicott 
Arcade.  Missouri,  St.  Joseph,  513  Francis  street;  St.  Louis,  617  Locust 
street. 

New  Jersey,  Elizabeth,  87  Broad  street ;  Englewood,  Woman's  Work 
Exchange,  Palisade  avenue;  Morristown,  Woman's  Work  and  Art 
Exchange,  South  street;  Newark,  Exchange  for  Woman's  Work,  544 
Broad  street ;  New  Brunswick,  Woman's  Depository  and  Exchange, 
Neilson  street;  Plainfleld,  61  Park  avenue.  New  York,  Albany,  46 
North  Pearl  street ;  Brooklyn,  Woman's  Work  Exchange  and  Decorative 
Art  Society,  122  Atlantic  avenue :  Buffalo,  298  Main  street ;  Mt.  Vernon, 
66  Fourth  avenue;  New  York,  Exchange  for  Woman's  Work,  329  Fifth 
avenue;  New  York,  Harlem  Exchange  for  Woman's  Work,  40  West 


DIRECTORY   OF  WOMEN's   EXCHANGES.  333 


125tli  street;  New  York,  Madison  Avenue  Depository  and  Exchange 
for  Woman's  Work,  628  Madison  avenue,  comer  59th  street ;  Rochester, 
Rochester  Art  Exchange,  510-12-14  Powers'  Building;  Troy,  43  Fourth 
street;  Utica,  240  Genesee  street.  Ohio,  Cincinnati,  Comer  Race  and 
Longworth  streets ;  Cleveland,  61  Kendal  Building,  106  Euclid  avenue; 
Columbus,  17  High  street. 

Pennsylvania,  Harrisburg,  Art  Exchange,  10  North  Mark  square; 
Lancaster,  118y2  East  King  street;  Philadelphia,  Ladies'  Depository 
Association,  1108  Walnut  street;  Philadelphia,  Exchange  for  Woman's 
Work ;  Pittsburgh  and  Allegheny,  Woman's  Industrial  Exchange,  628 
Pennsylvania  avenue,  Pittsburg.  Rhode  Island,  Bristol,  Exchange  for 
Woman's  Work,  Hope  street;  Neport,  Woman's  Exchange,  24  Washing- 
ton square;  Providence,  R.  I.  Exchange  for  Woman's  Work,  29-33 
Market  square.  South  Carolina,  Charleston,  Exchange  for  Woman's 
Work,  217  King  street.  Tennessee,  Memphis,  Exchange  for  Woman's 
Work,  32  North  Court  street.  Texas,  Houston,  120  Main  street;  San 
Antonio,  7  Avenue  D. 

Virginia,  Charlottesville,  Exchange  for  Woman's  Work,  124  Main 
street ;  Lynchburg,  811  Main  street ;  Norfolk,  Woman's  Work  Exchange, 
43  Granby  street;  Richmond,  Exchange  for  Woman's  Work,  327  East 
Franklin  street;  Staunton,  Main  street.  Washington,  Tacoma,  Tacoma 
Exchange,  109  South  10th  street.  Wisconsin,  Madison,  12  Carroll  street; 
Milwaukee,  Woman's  Industrial  Exchange,  413  Milwaukee  street; 
Oshkosh,  22  Washington  street.  Dominion  of  Canada,  Montreal, 
Woman's  Industrial  Exchange,  2260  St.  Catherine  street. 


The  Laws  Relative  to  Co-operation. 


BY  EDMUND  P.  KENDRICK. 

All  abstract  of  the  laws  of  the  States  and  Territories  concerning  the 
organization  of  cooperative  associations,  talcen  from  the  best  sources 
obtainable,  is  given  below.  In  many  of  the  States  there  is  no  special 
law  for  organization  of  work  associations.  In  such  cases  the  law 
governing  ordinary  business  corporations  is  given.  Corporations 
organized  under  general  laws  will  often  be  as  useful  as  if  under  a 
special  law  for  cooperative  societies.  Some  States  have  special  statutes 
relative  to  cooperative  fire  insurance,  banks  and  banking  associations. 

The  abstracts  given  are  generally  only  brief  summaries  of  the  law  in 
each  State.  It  will  generally  be  found  advisable  to  employ  some 
attorney  to  assist  in  the  drawing  up  of  papers,  and  to  see  that  all  the 
requirements  of  statutes  are  complied  with.  Sets  of  the  blanks 
required  can  in  most  cases  be  obtained  by  writing  to  the  Secretary  of 
State  at  the  State  Capital. 

Alabama— No  special  law  for  co-operative  enterprises.  Two  or  more  persons 
can  form  themselves  into  a  private  corporation  for  the  purpose  of  carrying  on  any 
lawful  business  except  certain  kinds  specifically  provided  for  by  law,  by  filing  in 
the  probate  court  of  the  County  where  such  company  proposes  to  have  its  principal 
place  of  business  a  written  declaration  signed  by  themselves  setting  forth  the 
names  and  residences  of  the  petitioners,  the  name  ol  liie  proposed  corporation, 
the  place  wliere  It  is  to  have  its  principal  or  only  place  of  business,  the  nature  of 
the  business  to  be  done,  the  amount  of  capital  stock.  Fifty  per  cent  of  the  pro- 
posed capital  stock  must  be  subscribed,  and  twenty  per  cent  paid  in  before  tha 
court  will  issue  a  certificate  of  incorporation  and  the  company  authorized  to  do 
business. 

Arizona— Any  number  of  persons  may  form  a  corporation  for  any  lawful  kind 
of  business.  The  corporators  before  commencing  business  must  adopt  articles 
which  must  be  signed  and  acknowledged  same  as  deeds  and  recorded  in  the  County 
recorder's  office.  The  articles  nnist  contain  the  name  of  the  corporators  and  of  the 
corporation;  the  nature  of  the  business  to  be  transacted;  amount  of  capital  stock 
and  how  and  when  to  be  paid  in;  time  of  commencement  and  expiration;  what 
officers  the  company  is  to  have  and  when  and  how  elected;  the  largest  amount  of 
Indebtedness  to  be  contracted;  whether  or  not  private  property  is  to  be  exempt. 
This  last  is  Important  as  otherwise  corporators  are  liable  for  debts.  Articles  must 
be  published  six  days  in  a  newspaper  published  In  the  County.  The  company  may 
then  commence  doing  business.  Copy  of  newspaper  must  be  filed  in  the  office  of 
secretary  of  the  territory  with  three  months.  For  general  purposes  the  existence 
must  be  limited  to  twenty-five  years,  but  may  be  renewed. 

Arkansas- Any  number  of  i)ersons,  not  less  than  three,  may  associate  them- 
selves under  the  general  corporation  law  for  any  lawful  purpose.  The  capital 
stock  must  be  divided  into  shares  of  twenty-five  dollars  each.  The  corporators  at 
the  first  meeting  adopt  articles  of  incorporation  and  elect  directors.  The  directors 
choose  the  other  officers.    Before  commencing  business  a  certificate  stating  names 

334 


THE  LAWS  EELATIVE  TO   COOPEBATION.  335 


of  Incorporators,  etc.,  copy  of  articles  of  Incorporation  must  be  filed  with  the 
Secretary  of  State  and  with  the  County  Clerk. 

Califoknia— Organizations  must  be  under  general  corporation  law.  Five  or 
more  persons  may  associate  themselves  for  any  lawful  purpose.  They  must  adopt 
articles  of  incorporation  setting  forth  the  name,  place  of  business,  purpose,  term  of 
existence  not  to  exceed  fifty  years,  number  and  names  of  directors,  amount  of 
capital  stock  and  amount  paid  in.  The  articles  must  be  signed,  acknowledged  and 
filed  with  the  Secretary  of  State  and  County  Clerk.  Ten  per  cent  of  the  subscribed 
capital  must  be  paid  In  before  articles  are  filed.  In  this  State  stockholders  are 
liable  for  such  proportion  of  the  debts  of  the  company  as  their  part  of  the  capital 
stock  bears  to  the  whole  capital.  The  full  text  of  the  special  law  Insuring  the 
safety  of  loans  stored  In  the  local  warehouses,  as  referred  to  in  page  196,  is  as 
follows : 

Section  1.  That  no  warehouseman,  wharfinger,  or  other  person,  doing  a  storage 
business,  shall  issue  any  receipt  or  voucher  for  any  goods,  wares,  merchandise, 
grain,  or  other  produce  or  commodity,  to  any  person  or  persons  purporting  to  be 
the  owner  or  owners  thereof,  unless  such  goods,  wares,  merchandise,  grain  or  other 
produce  or  commodity,  shall  have  been  bona  fide  received  into  store  by  such 
warehouseman,  wharfinger,  or  other  person,  and  shall  be  in  store  and  under  his 
control  at  the  time  of  issuing  such  receipt. 

Sec.  2.  That  no  warehouseman,  wharfinger,  or  other  person  engaged  In  the 
storage  business,  shall  issue  any  receipt  or  other  voucher  upon  any  goods,  wares, 
merchandise,  grain,  or  other  produce  or  commodity,  to  any  person  or  persons,  as 
security  for  any  money  loaned,  or  other  Indebtedness,  unless  such  goods,  wares, 
mercliandise,  grain,  or  other  produce  or  commodity  sliall  be,  at  the  time  of  Issuing 
such  receipt,  the  property  of  such  warehouseman,  wharfinger,  or  other  person, 
shall  be  in  store  and  under  control  at  the  time  of  issuing  such  receipt  or  voucher  as 
aforesaid. 

Sec.  3.  That  no  warehouseman,  wharfinger,  or  other  person  as  aforesaid,  shall 
issue  any  second  receipt  for  any  goods,  wares,  merchandise,  gi'aln,  or  other  procUue 
or  commodity,  wliile  any  former  receipt  for  any  such  goods  or  chattels  as  afore- 
said, or  any  part  thereof,  shall  be  outstanding  and  uncancelled. 

Sec.  4.  That  no  warehouseman,  wharfinger,  or  other  person  as  aforesaid,  shall 
sell  or  encumber,  ship,  transfer,  or  in  any  manner  remove  beyond  his  innnedlate 
control,  any  goods,  wares,  merchandise,  grain,  or  other  produce  or  commodity  for 
which  a  reei'li>t  shall  have  been  given  as  aforesaid,  without  the  written  assent  of 
the  person  or  persons  holding  such  receipt  or  receipts  plaliUy  indorsed  thereon  In 
Ink. 

Sec.  5.  Warehouse  receipts  for  property  stored  shall  be  of  two  classes:  First, 
transferable  or  negotiable:  and  second,  rion-transferal)k'  or  non-negotiable.  Under 
the  first  of  these  classes,  all  property  shall  be  transferable  by  the  indorsement  of 
the  party  to  whose  order  such  receipt  may  be  Issued,  and  sucli  Indorsement  of  the 
party  shall  be  deemed  a  valid  transfer  of  "the  proi)erty  represented  by  such  receipt, 
and  may  be  In  l)lank  or  to  the  or<Ier  of  another.  All  warehouse  receipts  for 
property  stored  shall  distinctly  state  on  their  face  for  what  they  are  Issued,  as, 
also,  the  brands  and  <llstln)zui>liing  marks;  and  In  the  case  of  grain,  the  number  of 
sacks  and  number  of  pounds,  and  kind  of  grain;  also,  the  rate  of  storage  per 
month  or  season  charged  for  storing  the  same. 

Sec.  6.  No  warehouse  man,  or  person  or  persons,  giving  or  Issuing  negotiable 
re<;elpts  for  goods,  grain  or  other  in-opcrty  on  storaijo,  shall  di'llver  sjild  i)roperty, 
or  any  part  thereof,  without  liidor.sliig  iii"in  tin'  back  of  saiil  i  ccclpt  or  receipts.  In 
Ink.  the  amount  and  date  of  the  deliveries.  Nor  shall  hi'  en-  tliey  be  allowed  to 
make  any  off-set,  claim,  or  denianil  other  than  as  ('x|)resHed  on  the  fact^  of  the 
recelnt  or  receipts  ls.sued  for  the  sajiie,  when  caUed  upon  to  deliver  sjild  goods, 
mercnamllse,  grain,  or  other  proi)erty. 

Sec.  7.  No  waridiousemaii,  or  person  or  persons,  doing  a  getieral  storage  buslnes, 
giving  or  l.ssuliig  non-negotiable  or  non-transf('rai)l<!  receipts  for  goods,  grain,  or 
other  |)ro|)erty  on  storage,  shall  deliver  said  proi)erty,  or  any  part  thereof,  excejtt 
upon  the  written  order  of  the  person  or  i)ersons  to  whom  the  receipt  or  receipts 
were  Lssued. 

Sec.  8.  All  receipts  Issued  by  any  warehouseman  or  other  i)erson  under  this  Act, 
other  than  negotiable,  shall  have  printed  acro.ss  their  face,  In  bold  distinct  letters 
In  red  Ink,  the  words  non-negotiable. 

Sec.  0.  No  warehouseman,  personor  persons,  doing  ageneral  storage  business,  shall 
be  re.sponslble  fur  any  loss  or  damage  to  pniiierty  by  fin-  while  In  his  or  their 
custody,  provided  reasonable  care  and  vigilance  be  e.\erclsed  to  protect  and 
preserve  the  .same. 

Sec.  10.  Any  warehou.seman,  wharfinger,  iwrson  or  persons.who  shall  violate  an v 
of  the  foregoing  jtrovlslonsof  thi.s  Act,  is  gtiiltv  of  felony, shall  be  subject  to  Indict- 
ment, and,  upon  conviction,  sh;ill  be  fined  in  a  siini  not  exceeding  i?5,()0(i,  or 
Imprisonment  In  the  Slate  Prison  not  exeeedlie,'  live  years,  or  both.  And  all  and 
every  person  aggrieved  liv  the  violation  of  aiiv  of  the  |irovlslons  of  this  Act,  may 
have  and  maintain  an  action  against  the  (lerson  or  persons  violating  any  of  the 
foregoing  provisions  of  this  Act,  to  recover  all  damages,  immediate  or  consequent, 


330  HOW  TO  COOPEBATE. 


which  he  or  they  may  have  sustained  by  reason  of  any  such  violation  as  aforesaid, 
before  any  court  of  competent  jurisdiction,  whether  such  person  shall  have  been 
convicted  under  the  Act  or  not. 

Colorado — Organizations  to  be  under  general  corporation  law.  Three  or  more 
persons  may  organize.  They  must  adopt,  sign  and  acknowledge  a  certificate  of 
incorporation,  which  shall  contain  the  name  of  the  company,  business  to  be  carried 
on,  amount  of  capital  stock,  term  of  proposed  existence  not  exceeding  twenty 
years,  number  of  sliares  of  slock,  place  where  business  is  to  be  carried  on.  A  copy 
of  the  certificate  is  to  be  filed  with  the  recorder  of  each  County  and  in  the  office 
of  the  Secretary  of  State.  Shares  of  stock  must  not  be  less  than  one  dollar  nor 
more  than  one  hundred  dollars  each. 

Connecticut— Seven  or  more  persons  may  associate  themselves  together  and 
form  a  co-operative  association  by  articles  of  agreement  signed  by  the  members 
and  recorded  in  the  Clerk's  office  of  the  town  where  the  business  is  to  be 
transacted.  The  first  meeting  should  be  called  by  notice  as  provided  by  statute, 
or  this  notice  may  be  received  in  writing  by  all  the  signers  to  the  agreement.  A 
copy  of  the  by-laws  must  be  recorded  in  the  Town  Clerk's  office.  The  business  of 
the  association  is  to  be  managed  by  a  president,  treasurer  and  a  board  of  not  less 
than  five  directors.  The  capital  stock  cannot  exceed  g50,000.  No  person  can 
become  a  stockholder  except  by  the  consent  of  the  managers. 

Delaware— The  purposes  for  which  a  corporation  or  association  may  be  formed 
in  this  State  are  limited,  but  the  process  is  simple.  They  are  formed  under  the 
general  corporation  Act,  which  provides  for  incorporation  for  the  purposes  of 
carrj-ing  on  any  manufacturing  business,  for  preserving  animal  or  vegetable  f ood,f or 
draining  low  lands,  for  business  loan  associations  and  for  religious,  charitable  and 
literary  purposes.  Three  or  more  persons  make  articles  in  writing  stating  the 
objects,  conditions,  capital,  name,  etc.,  and  present  them  to  the  associate  judge  of 
the  supreme  court  of  the  County  in  which  the  principal  business  is  to  be  transacted. 
If  after  examination  and  publication  no  sufficient  reason  is  shown  to  the  contrary, 
the  signers  are  incorporated.  It  is  probable  that  business  can  be  obtained  to 
maintain  co-operative  stores,  etc. 

District  of  Columbia— Must  organize  under  general  corporation  law.  The 
process  is  in  brief,  by  making  and  acknowledging  a  certificate,  and  recording  the 
same  in  the  office  of  the  Recorder  of  the  District. 

Florida— Organizations  to  be  under  general  corporation  law.  Notice  must  be 
published  in  newspaper  containing  name,  place  and  nature  of  business,  amount  of 
stock,  how  paid  in,  time  of  commencement  and  termination,  highest  amount  of 
indebtedness,  list  of  officers.  Copies  of  articles  are  to  be  filed  with  Secretary  of 
State,  and  Clerk  of  Circuit  Court.    The  corporation  exists  when  the  articles  are  filed. 

Georgia— Corporations  under  general  laws  are  granted  by  the  Supreme  Court. 
The  persons  desiring  a  charter  file  a  petition  in  the  clerk's  office,  stating  the  objects 
of  the  association,  name,  amount  of  capital,  etc.  The  court  after  notice  by 
publication  can  grant  the  charter.  The  charter  is  for  twenty  years  with  privilege 
of  renewal. 

Idaho— Five  or  more  persons  may  file  a  certificate  acknowledged  by  them  in  the 
office  of  the  Recorder  where  the  principal  place  of  business  is  to  be  located.  The 
certificate  should  state  the  name  of  the  proposed  company,  place  of  buslnessi 
amount  of  stock,  number  of  shares,  time  of  existence,  not  to  exceed  fifty  yeai-s, 
number  and  names  of  trustees.  The  trustees  named  shall  hold  their  offices  for 
three  months.  Each  stockholder  is  liable  for  his  proportion  of  the  debts  of  the 
company. 

Illinois— May  organize  under  the  Act  providing  for  the  incorporation  of 
co-operative  associations,  or  under  general  laws  for  forming  corporations.  Under 
the  first  named  Act  not  less  than  three  nor  more  than  seven  persons  who  desire  to 
become  incorporated  as  a  co-operative  association  for  the  prosecution  of  any 
branch  of  industry,  may  make  a  statement  to  that  effect  under  their  hands  and 
seals  duly  acknowledged,  setting  forth  the  name  of  proiwsed  association,  capital 
stock,  duration,  location  and  the  particular  branch  of  industr>'  which  they  intend  to 
prosecute.    This  statement  is  to  be  filed  in  the  office  of  the  Secretary  of  Stata. 


THE  LAWS  BELATIVE   TO    COOPERATION.  337 


The  secretary  shall  therefore  Issue  a  license  to  such  persons  as  commissioners  to 
open  books  for  subscription.  No  person  can  take  more  or  less  than  one  share. 
When  t«n  or  more  shares  are  subscribed  the  commissioners  call  a  meeting  of  the 
subscribers  for  the  purpose  of  organizing  by  electing  directors,  adopting  by-laws, 
etc.  The  commissioners  make  a  report  to  the  Secretary  of  State,  who  issues  a 
certificate  of  Incorporation,  and  when  a  copy  of  the  certificate  is  recorded  in  the 
office  of  the  Recorder  of  Deeds  of  the  County  where  the  principal  place  of  business  Is 
located  the  association  is  fully  organized  and  ready  for  business.  The  shares  of 
stock  under  this  law  shall  not  be  less  than  jjSSO  nor  more  than  g2,000  in  value. 
It  is  intended  in  associations  organized  under  this  Act  that  each  shareholder  shall 
put  in  his  own  labor  for  the  benefit  of  the  association,  or  may,  when  necessary, 
employ  a  competent  substitute,  the  chief  feature  of  the  associations  being  the 
co-operation  of  labor. 

Corporations  may  be  formed  in  a  similar  manner,  under  the  general  corporation 
law,  without  this  principle  of  co-operation  of  labor,  the  value  of  the  shares  being 
from  ten  to  two  hundred  dollars,  no  limit  as  to  the  number  of  shares  to  be  taken 
by  each  subscribed. 

Indiana— Companies  may  be  Incorporated  by  three  or  more  persons.  Articles 
c-'  association  are  to  be  executed  and  filed  In  the  oflice  of  the  Secretary  of  State. 
When  the  requirements  of  organization  are  compared  with  it,  a  statement  Is  to  be 
recorded  in  the  office  of  the  Clerk  of  the  Circuit  Court. 

Indian  Tkrkitoky— Chkeokek  Nation— No  associations  of  this  character 
are  chartered  within  the  limits  of  the  Cherokee  Nation,  except  for  mining  purposes. 
A  license  to  trade  may  and  must  be  obtained  from  the  National  Council.  A  tax  on 
the  value  of  goods  offered  for  sale  must  be  paid  to  the  National  Treasury. 

IOWA— By  the  general  corporation  law  any  number  of  persons  may  sign  and 
acknowledge  articles  of  incorporation,  which  are  to  be  recorded  in  the  office  of  the 
Recorder  of  Deeds  in  the  County  in  which  the  principal  place  of  business  Is  to  be 
located.  A  notice  must  be  published  for  four  weeks  in  a  newpaper  In  the  County. 
The  notice  must  contain  the  home  of  the  company  and  its  principal  place  of 
business;  the  nature  of  the  business;  amount  of  capital  stock  authorized  and 
when  it  Is  to  be  paid  In;  time  of  commencement  and  termination;  names  of 
officers;  highest  amount  of  Indebtedness,  and  whether  private  property  Is  to  be 
exempt.    The  corporation  exists  as  soon  as  the  articles  are  filed  with  the  Recorder. 

Kansas— Corporations  are  organized  by  five  or  more  persons.  If  co-operative, 
the  number  must  be  twenty  or  more.  The  method  of  organizing  is  by  filing  a 
charter  with  the  Secretary  of  State,  giving  the  name  of  the  company,  object  for 
which  It  Is  formed,  place  of  business,  number  of  directors,  amount  of  capital  stock, 
number  of  shares,  etc. 

Kentucky— Any  number  of  persons  may  associate  themselves  for  most  any 
kind  of  legal  business.  They  must  adopt  articles  of  Uicorporatlon,  which  are  to  be 
8lgne<l,  acknowledged  and  recorded  In  the  office  of  the  County  Clerk  of  the  County 
where  the  principal  place  of  business  Is  to  be  located.  The  corporation  Is  then 
ready  for  business. 

Louisiana— Three  or  more  persons  may  organize  under  the  general  corporation 
law,  with  a  capital  of  not  less  than  $6,000.  The  name  of  the  company  or  associa- 
tion must  have  the  word  "  limited  "  as  the  last  word  of  the  name,  otherwise  all 
the  members  are  liable  for  the  debts  of  the  concern.  The  charter  or  statement  of 
association  must  contain  certain  facts  as  retiuired  by  statute.  All  charters  must 
be  recorded  In  the  mortgage  office  of  the  parish  where  the  corporation  is  located. 

Maine— Three  or  more  persons  may  associate  themselves  together  for  the  pur- 
pose of  forming  any  lawful  business,  by  written  articles  of  agreement.  The  first 
meeting  is  called  by  one  of  the  subscribers,  giving  the  others  fourteen  days  notice, 
or  by  publication.  At  this  meeting  they  can  organize  as  a  corporation,  adopt  a 
name,  define  the  purposes,  fix  the  amount  of  capital  stock  which  shall  not  be  less 
than  $1,000,  elect  officers  and  adopt  by-laws.  Before  commencing  business  the 
president,  treasurer  and  a  majority  of  the  directors  shall  prepare  a  certificate 
setting  forth  the  required  facts  concerning  the  company,  and  shall  sign  and  make 
oath  to  it    After  the  certificate  has  been  examined  by  the  Attorney  General  ana 

22 


388  HOW  TO   COOPERATE. 


certlfled  by  blm  to  be  correct,  it  is  recorded  in  tbe  registry  of  deeds  and  a  certified 
copy  filed  in  the  office  of  the  Secretary  of  State.  The  corporation  exists  from  the 
time  of  the  filing  in  the  office  of  the  Secretary  of  State. 

Maryland— Corporations  may  be  formed  by  five  or  more  persons.  Th«y  must 
make,  sign  and  acknowledge  a  certificate  stating  the  name,  which  shall  always 
include  the  name  of  the  City  or  County  where  it  is  formed;  the  names  and 
residence  of  the  corporators,  the  kind  of  business  to  be  transacted,  the  time  of  Its 
proposed  existence,  not  to  exceed  forty  years;  the  articles  and  conditions  under 
which  It  is  to  be  formed,  amount  of  capital  stock,  place  of  business,  number  of 
directors  or  trustees  and  the  number  of  those  who  are  to  manage  the  business  the 
first  year.  This  certificate  is  to  be  certified  to  by  one  of  the  Judges  of  County  or 
City  where  the  corporation  Is  to  be  located  and  is  then  to  be  recorded. 

Massachusetts— Under  the  general  law  a  corporation  may  be  formed  for  the 
purpose  of  co-operation  In  carrying  on  any  trade  or  business,  with  a  capital  of  not 
less  than  one  thousand  nor  more  than  one  hundred  thousand  dollars.  The  word 
"  co-operative  "  shall  be  in  the  name.  The  association  if  formed  by  seven  or  more 
persons  associating  themselves  together  by  an  agreement  in  writing,  stating  the 
name,  purpose,  location,  amount  of  capital  stock,  par  value  and  number  of  shares. 
The  first  meeting  is  called  by  one  of  the  subscribers,  notifying  the  others  by  a 
written  notice  delivered  or  mailed  to  the  others  at  least  seven  days  before  the 
time  of  holding  the  meeting.  At  this  meeting  the  corporation  Is  organized  by  the 
election  of  clerk,  adoption  of  by-laws  and  election  of  other  officers  as  called  for  by 
the  by-laws.  The  directors  choose  the  president  The  proceedings  are  certified 
by  the  Commissioner  of  Corporations,  but  before  the  corporation  can  commence 
doing  business,  the  capital  stock  must  be  paid  in  in  full,  and  a  certificate  of  that 
fact  sworn  to  by  the  president,  treasurer  and  a  majority  of  the  directors  filed  with 
the  Secretary  of  State.  The  capital  can  be  Increased  as  required  to  the  limit 
named.  The  law  provides  that  in  co-operative  associations  no  one  person  shall 
hold  shares  more  than  one  thousand  dollars  in  amount  at  par  value.  No  distribu- 
tion of  profits  shall  be  made  untU  at  least  ten  per  cent  of  the  net  profits  has  been 
appropriated  for  a  contingent  or  sinking  fund,  untU  there  has  accumulated  a  simi 
equal  to  thirty  per  cent  in  excess  of  the  capital  stock. 

Michigan— Any  seven  or  more  persons  may  unite  in  a  co-operative  association 
for  the  purpose  of  purchasing  groceries,  provisions  and  any  other  articles  of 
merchandise  and  selling  the  same  to  the  stockholders  and  others  at  such  reasonable 
price  over  the  cost  thereof,  as  will  enable  the  members  to  obtain  such  commodity 
at  the  smallest  practicable  rate  of  cost,  and  also  to  manufacture  articles  and  sell 
them  as  aforesaid,  for  the  purpose  of  raising  produce  and  animals  and  for  other 
purposes.  They  may  become  incorporated  by  signing  and  acknowledging  articles 
of  association  stating  the  purpose  for  which  it  is  formed,  number  of  officers  and 
directors,  names  of  those  first  agreed  on,  amount  of  capital  stock  and  number  of 
shares,  amount  of  capital  paid  in,  names  of  the  stockholders  with  residence  and 
number  of  shares  taken  by  each;  the  name  of  the  corporation,  place  where  busi- 
ness is  to  be  transacted,  the  time  and  place  of  the  annual  meeting,  etc.  Before  the 
corporation  can  commence  business  the  articles  shall  be  filed  in  the  office  of  the 
Secretary  of  State  and  with  the  County  Clerk. 

M1NNE.SOTA— Co-operative  associations  may  be  formed  by  seven  or  more  persons. 
The  capital  stock  is  limited  to  Ull.OOO.  All  that  Is  required  by  legal  organization  is 
to  make  articles  of  association  setting  forth  objects,  place  of  business  and  amount 
of  capital  stock.  The  by-laws  are  to  be  filed  with  the  Clerk  of  the  town  where 
located. 

Mississippi- A  proposed  charter  is  to  be  drawn  up  and  subscribed  to  the 
Attorney  General.  If  approved  by  him  it  is  submitted  to  the  Governor,  and  when 
approved  by  him  it  is  sealed  with  the  State  seal.  The  charter  Is  then  recorded  in 
the  office  of  the  Secretary  of  State. 

Missouri— Articles  of  Incorporation  are  to  be  drawn  up  under  the  general 
corporation  law,  setting  forth  the  facts  as  to  the  proposed  company.  They  must 
be  signed  and  acknowledged  by  the  parties  and  recorded  in  the  office  of  the 
Secretary  of  State,  who  issues  a  certificate  of  incorporation.    One-half  of  the 


THE  LAWS  BELATIVE  TO  COOPEBATIOK.  S39 


capital  stock  must  be  paid  up  before  commencing.   The  corporation  must  be  for 
a  definite  number  of  years  not  exceeding  fifty. 

Montana— Corporations  may  be  formed  by  three  or  more  persons.  They  must 
make,  sign  and  acknowledge  a  certificate  setting  forth  the  name,  object,  capital, 
number  of  shares,  term,  not  more  than  twenty  years,  place  of  business  and  the 
names  of  the  trustees  first  elected.  This  certificate  is  filed  in  the  Kecorder's  office, 
and  a  duplicate  recorded  in  the  office  of  the  Secretary  of  State. 

Nkbraska— Any  number  of  persons  may  Incorporate.  They  adopt  articles  of 
incorporation  and  have  them  recorded  In  the  office  of  the  County  Clerk.  Notice  of 
the  Incorporation  is  to  be  published.  The  indebtedness  of  the  company  shall  not 
exceed  two-thirds  the  amount  of  the  capital  stock. 

Nevada— Three  or  more  persons  may  organize  a  corporation.  They  make,  sign 
and  acknowledge  a  certificate  irhicta  shall  state  the  name,  object,  amount  of 
capital  stock,  term  of  existence,  not  exceeding  fifty  years;  number  of  shares, 
number  and  names  of  trustees  and  principal  place  of  business.  The  certificate  is 
to  be  filed  in  the  office  of  the  Coxmty  Clerk. 

New  Hampshikk— Corporations  with  a  capital  stock  of  from  gll.OOO  to  f  10,000  by 
five  or  more  persons  making  written  articles  of  agreement  recorded  in  the  Town 
where  the  principal  place  of  business  Is  to  be  transacted,  and  In  the  office  of  the 
Secretary  of  State. 

New  Jersey— Seven  or  more  persons  may  form  a  Co-operative  Company  by 
making  and  filing  a  certificate  of  their  organization,  stating  name,  amount  of 
capital  stock,  which  shall  not  be  less  than  gl.OOO  nor  more  than  g50,000:  number 
and  par  value  of  shares,  names  and  residences  of  stockholders  and  niunber  of  shares 
held  by  each,  principal  place  of  business,  time  of  existence,  which  shall  not  be  over 
fifty  years.  The  certificate  is  to  be  acknowledged  and  recorded  in  the  office  of 
the  County  Clerk  and  a  copy  filed  in  the  office  of  the  Secretary  of  State. 

New  Mexico— Substantially  same  as  New  Jersey,  except  that  a  copy  of  the 
articles  is  to  be  filed  with  the  Clerk  of  Probate  Instead  of  County  Clerk. 

New  York— Any  number  of  persons,  not  less  than  three,  may  form  an  Incorpora- 
tion or  company  for  the  purpose  of  uniting  their  labor,  capital  or  patronage  on  the 
co-operative  plan,  by  filing  in  the  office  of  the  Secretary  of  State  a  declaration 
signed  by  the  corporators,  expressing  their  intentions  to  form  such  a  company 
together  with  a  copy  of  the  charter  proposed  to  be  acepted  by  them.  Capital  stock 
must  be  at  least  gl.OOO;  ten  per  cent  must  be  paid  In  in  cash.  See  Revised  Statutes 
of  New  York,  page  1626. 

Any  number  of  persons,  not  less  than  three,  may  form  a  corporation  for  the 
business  of  making  butter,  cheese,  condensed  milk  or  other  products  by  the  dairy, 
and  certain  other  purposes.  They  shall  file  in  the  office  of  the  Clerk  of  the  County 
and  a  duplicate  In  the  office  of  the  Secretary  of  State,  a  certificate  In  which  shall  be 
noted  tlie  name  of  the  company,  the  business  to  be  carried  on  and  the  amount  of 
capital  stock,  the  time  of  existence  of  the  company,  not  to  exceed  fifty; 
iiaiiien  of  trustees,  number  of  shares  of  stock,  etc.  The  stock  must  be  paid  for 
half  within  one  year  and  the  balance  in  two  years.  Revised  Statutes  of  New  York, 
pak'R  1731. 

North  Caroi,jna— Corporations  may  be  formed  by  three  or  more  persons 
either  with  or  without  personal  liability  for  debts,  by  filing  and  recording  a  plan 
of  lncon>oratlon  in  the  office  of  the  Clerk  of  Courts  and  of  the  Registrar  of  Deeds 
for  the  County  In  which  the  principal  place  of  business  is  to  be  transacted. 

North  Dakota— Articles  of  Incorporation  must  be  signed  and  acknowledged 
by  three  or  more  persons  and  filed  In  the  office  of  the  Secretary  of  State.  The 
secretary  must  Issue  to  the  corporation  a  certificate  that  the  articles  have  been  80 
filed  and  that  they  contain  a  statement  of  the  necessary  facts,  which  facts  are 
those  usually  reciulred  In  the  State. 

Ohio— The  following  Is  from  the  laws  of  Ohio: 

An  association  lncon>orated  for  the  puri)ose  of  purchasing,  in  quantity,  grain 
goods,  groceries,  fruit,  vegetables,  provisions,  or  any  other  articles  of  merchandise, 
and  distributing  the  same  to  consumers  at  the  actual  cost  and  expense  of  purchas- 
ing, holding  and  distributing  the  same,  may  employ  its  capital  and  meanB  In  the 


340  HOW    TO   COOPERATE. 


purchase  of  snch  articles  of  merchandise  as  it  deems  best  for  the  company,  and 
in  the  purcliase  or  lease  of  such  real  and  personal  estate,  subject  always  to  the 
control  of  the  stockholders,  as  may  be  necessary  or  convenient  for  purposes 
connected  with  and  pertaining  to  Its  business,  and  may  adopt  such  plan  of 
distribution  of  its  purchases  among  the  stockholders  and  others  as  it  deems  most 
convenient,  and  best  adapted  to  secure  the  ends  proposed  by  the  organization;  and 
any  profits  that  may  arise  from  the  business  of  the  company  may  be  divided 
among  the  stockholders  from  time  to  time,  as  It  deems  expedient.  In  proportion  to 
the  several  amounts  of  their  respective  purchases. 

Such  an  association  can  be  formed  by  five  or  more  persons  subscribing  and 
acknowledging  articles  of  incorporation,  and  filing  the  same  in  the  office  of  the 
Secretary  of  State. 

Oregon— Tliree  or  more  persons  may  organize  a  corporation  by  making  and 
acknowledging  articles  of  association  containing  the  usual  statement  of  facts 
concerning  the  proposed  company.  Three  copies  should  be  made,  one  to  be  filed 
In  the  office  of  the  Secretary  of  State,  one  with  the  County  Clerk  and  one  to  be 
retained  by  the  company, 

Pknnstlvaki  A— Corporations  are  incorporated  by  the  governor.  The  Incorpora- 
tors, not  less  than must  sign  and  swear  to  a  certificate  containing  the  usual 

facts  concerning  the  corporation,  before  the  Recorder  of  the  County  where  the 
principal  place  of  business  is  to  be  located.  The  certificate  is  to  be  filed  with  the 
Secretary  of  State  and  advertised  for  tliree  weeks. 

Khode  Island— Corporations  must  be  chartered  by  the  General  Assembly  on 
petition  to  the  Assembly. 

South  Carolina- Applicants  for  incorporation  must  file  with  the  Secretary  of 
State  a  written  petition,  signed  by  themselves  individually,  which  must  set  forth: 
First:  The  names  and  residences  of  the  petitioners;  second,  the  name  of  the 
proposed  corporation,  the  place  at  which  it  proposes  to  have  its  principal  or  only 
place  of  business,  the  general  purpose  of  the  corporation  and  the  nature  of  the 
business  which  it  proposes  to  do;  third  the  amount  of  capital  stock,  which  must  be 
specifically  stated  and  not  put  in  tlie  alternative,  the  number  of  shares  into  which 
the  capital  stock  is  to  be  divided  and  the  par  value  of  each  share ;  fourth,  any 
other  matter  which  it  may  be  desirable  to  set  forth  in  the  organic  law. 

Upon  the  filing  of  such  a  petition,  the  Secretaryof  State  will  issue  to  two  or  more 
of  the  petitioners  a  commission  constituting  them  a  board  of  corporators,  giving 
them  authority  to  open  books  of  subscription  to  the  capital  stock  of  the  proposed 
company,  and  requiring  them  to  give  notice  of  the  times  and  places  of  the  opening 
of  the  books  of  subscription.  Before  a  charter  can  be  granted  fifty  per  cent  of  the 
capital  stock  must  be  subscribed.  When  this  is  done  the  board  of  corporators  must 
call  the  subscribers  together  by  electing  a  board  of  directors,  etc. 

South  Dakota— Same  as  North  Dakota. 

Tennessee— Five  or  more  persons  may  apply  to  be  organized  as  a  corporation. 
The  application  is  to  be  made  in  the  form  prescribed  by  the  code,  accompanied  by 
a  charter.  The  papers  are  to  be  signed  and  acknowledged  before  the  County 
Court  and  recorded  In  the  Register's  office.  All  the  papers  are  then  to  be  registered 
In  the  office  of  the  Secretary  of  State,  who  certifies  the  fact  under  the  seal  of  the 
State. 

Texas— In  this  State  a  charter  is  to  be  drawn  up  showing  the  name,  place 
of  business,  object,  number  and  names  of  directors,  amount  of  capital  stock,  etc.,  of 
the  proposed  corporation.  The  charter  is  to  be  signed  and  acknowledged  by  three 
or  more  persons,  and  recorded  in  the  office  of  the  Secretary  of  State.  A  copy  of 
the  charter  under  the  seal  of  the  State  is  evidence  of  the  incorporation. 

Utah— Five  or  more  persons  may  organize  as  a  corporation  under  general  laws. 
The  incorporators  sign  a  written  agreement  which  must  be  acknowledged  by  three 
of  them  before  the  Judge  of  Probate,  stating  name,  place  and  kind  of  business 
amount  of  capital  stock,  value  of  each  share,  the  limit  of  stock  agreed  upon, 
number  and  kind  of  officers,  with  term  of  service  and  manner  of  election ;  also 
whether  or  not  the  stockholders  are  to  be  individually  liable,  with  any  other  facts 
desired  In  the  charter.    To  this  is  added  the  oath  of  tliree  or  more  of  the  corpor*- 


THE  LAWS  KELATIVE  TO  COOPERATION.  341 


tors  that  It  Is  their  intention  to  carry  on  said  business  and  that  the  signers  have 
paid  or  will  pay  the  amount  of  subscribed  capital.  The  agreement  Is  to  be  filed  in 
the  office  of  the  Probate  Clerk  and  there  recorded.  The  elected  officers  will  then 
take  their  oath  of  office.  The  Probate  Clerk  then  Issues  a  certificate  of  all  the  facts 
and  copies  of  all  the  papers  whlcli  Is  to  be  filed  in  the  office  of  the  Secretary  of 
the  Territory.  A  certificate  of  the  Secretary,  of  the  filing  of  the  above  papers 
constitutes  the  organizers  as  a  corporation. 

Vermont— A  corporation  can  be  organized  by  three  or  more  persons  uniting  by 
articles  of  association.  The  articles  should  be  substantioUy  as  follows: 
"We,    the  subscribers,  hereby  associate   ourselves  togeiher  as  a  corporation 

under  the  laws  of  the  State  of  Vermont,  to  be  known  by  the  name  of for 

the  purpose  of at in  the  County  of in  said  State,  with  a  capital  stock 

of divided  into shares  of dollars  each."    The  articles  signed  by  the 

corporators  are  to  be  transmitted  to  the  Secretry  of  State.  The  Secretary  is  to 
record  the  same  and  a  certified  copy  of  the  record  has  the  effect  of  a  special 
charter.  Before  the  company  commences  business  It  shall  publish  the  charter  at 
length  in  some  newsi  aper. 

Virginia— Corporations  may  be  obtained  for  most  any  lawful  purpose  by 
application  to  the  Courts.  The  Judges  have  the  power  to  issue  charters  either  at 
term  time  or  in  vacation. 

Washington— Two  or  more  persons  may  organize  a  corporation  by  executing 
three  copies  of  articles  of  incorporation,  stating  the  name,  object,  place  of  busi- 
ness, cai>ital  stock,  manner  of  electing  officers,  etc.  The  articles  are  to  be 
acknowledged  and  filed,  one  hi  the  office  of  the  Secretary  of  State,  one  In  the 
County  Auditor's  office  and  one  to  be  kept  by  the  corporation. 

West  Virginia— Joint  stock  companies  are  organized  by  an  agreement  to  form 
a  corporation  executed  and  acknowledged  by  five  or  more  persons.  Affidavits  of 
two  or  more  of  the  corjiorators  must  be  made,  stating  tliat  ten  per  cent  of  the 
subscribed  capital  has  l)een  paid  hi.  The  agreement  with  the  acknowledgements 
and  affidavits  is  to  be  delivered  to  the  Secretary  of  State,  who  will  Issue  a 
certificate  of  Incorporation. 

Wisconsin- Corporations  are  organized  by  three  or  more  citizens  of  Wisconsin, 
making  and  acknowledging  a  written  declaration  that  they  associate  themselves 
under  the  Statutes  for  the  purpose.  The  declaration  should  contain  a  statement 
of  the  tiame,  location,  object,  number  of  shares,  par  value,  duties  of  officers,  number 
of  directors,  and  other  provisions  and  by-laws  not  Inconsistent  with  law.  The 
articles  are  to  be  filed  with  the  Secretary  of  State,  and  recorded  In  the  registry  of 
deeds. 

Wyoming— Three  persons  or  more  may  organize  a  corporation  under  the  laws  of 
the  Territory.  The  corporators  make,  sign  and  acknowledge  duplicate  certificates 
stating  name,  place  of  business,  capital  stock,  purpose  of  the  corporation,  aNo  the 
term  of  existence,  not  to  exceed  fifty  years,  names  of  first  officers,  etc.  One  of 
the  certificates  Is  to  be  filed  In  the  office  of  the  County  Clerk  and  one  In  the  office 
of  the  Secretary  of  the  Territory. 

The  English  Law— The  Industrial  and  Provident  society  (Act  of  1878,  39  and 
40  Victoria,  Chapter  45)  Is  a  model  law  for  the  incorporation  and  management 
of  co-operative  societies,  at  least  under  English  conditions.  It  has  been  published 
with  notes  by  the  Central  Co-operative  Board,  Manchester,  England,  and  maybe 
olitained  by  those  interested  in  securing  better  legislation  for  co-operators  in  this 
country  by  sending  50c  to  the  above  a<Idres8.  After  certain  definitions  the  law 
provides  that  the  Industrial  and  Provident,  or  co-operative  societies  may  be 
registered  under  its  provisions  for  carrying  on  any  labor,  trade  or  handicraft, 
whether  wholesale  or  retail.  Including  the  buying  and  selling  of  land.  No  member 
other  than  a  registered  society  shall  hold  an  Interest  exceeding  fflOOO,  and  such 
member  shall  have  but  one  vote.  No  society  can  be  registered  unless  It  has  at 
least  seven  members  and  a  name  distinct  from  that  of  any  existing  society, 
the  word  "  limited "  being  the  last  word  in  the  name  of  every  society.  If  any 
registrar  refuse  to  register  a  society  or  its  rules,  appeal  Is  provided  for.  Tlic 
society's  rules  must  conform   to  the  law,  and  any  ameudinent«  must  also  tf 


342  HOW  TO   COOPEKATE. 


reiilstered.  Section  10  compels  every  society  to  have  a  registered  office  to  which 
all  commuulcatlons  and  notices  may  be  addressed;  to  have  its  name  conspicuously 
affixed  to  every  place  of  Its  business;  to  have  Its  accounts  audited  at  lease  once  a 
year,  cither  by  a  public  auditor  provided  for  In  the  law,  or  by  one  or  more  persons 
appointed  by  the  society;  to  send  to  the  registrar  an  annual  statement  of  the 
receipts  and  expenditures,  funds  and  effects,  with  auditor's  certificate;  to  allow 
members  to  Inspect  the  books,  supplying  each  gratuitously  with  a  copy  of  the 
annual  return,  and  post  Its  last  balance  sheet  in  a  prominent  place.  Such  societies 
may  take  deposits  of  not  less  than  gl.25  In  any  one  payment,  nor  more  than  glOO 
for  any  one  depositor,  payable  on  not  less  than  two  clear  days'  notice;  but  such 
societies  shall  make  no  payment  of  withdrawable  capital  while  any  claim  due  on 
accoimt  of  deposits  is  unsatisfied.  As  to  banking  operations  on  a  larger  scale,  the 
rules  provide  that  no  society  which  has  any  withdrawable  share  capital  shall  carry 
on  the  business  of  banking,  and  every  society  which  conducts  such  business  shall 
conspicuously  post  a  semi-annual  statement  of  its  condition  in  a  prescribed  form. 
It  is  an  offense  to  violate  any  provisions  of  the  law,  for  which  every  officer  of  the 
society  is  held  responsible,  under  heavy  penalties.  The  re^'istry  of  societies  is 
equivalent  to  incorporation,  and  its  documents  must  be  recorded.  Registry  binds 
the  society  and  all  its  members  to  its  rules  as  though  each  member  had  subscribed 
his  name  and  affixed  his  seal  thereto.  Money  due  from  members  is  a  debt  recover- 
able from  them.  The  society  is  exempt  from  income  tax.  Payments  of  deceased 
members'  Interest  are  provided  for,  and  the  rights  of  minors  as  members  are 
guarded.  The  rules  must  provide  for  a  register  of  members  and  shares,  for  the 
carrying  out  of  contracts,  holding  property,  advancing  money  to  members  or 
making  Investments,  the  application  of  profits,  discharge  of  mortgages,  etc.  Fraud 
or  misappropriation  of  a  societj''s  property  or  name  is  heavily  punished,  and  officers 
In  receipt  or  charge  ot  money  must  give  bonds  and  render  accounts.  Disputes 
may  be  referred  to  justices.  Members  may  appeal  to  registrars  for  an  Inspection 
of  the  society.  The  law  also  defines  special  resolutions  of  societies  and  the  pro- 
ceedings which  may  be  taken  thereon,  also  for  the  dissolution  of  societies.  It  also 
regulates  the  proceedings  or  the  duties  of  registrars  under  the  act. 

The  rules  of  the  Rochdale  Society,  printed  In  full  In  this  Appendix,  cover  all  the 
points  In  the  English  law. 


The  Bibliography  of  Co-operation. 

A  LIST  OF  BOOKS  ON  COOPERATION"  AND  ALLIED  TOPICS, 
INCLUDING  PAMPHLETS  AND  LEAFLETS. 

Any  of  the  following  marked  with  an  asterisk  (*)  may  be  obtained  from  the 

Orange  Judd  Co.,  52  lafayette  Place,  New  York,  N.  Y.,  postpaid  on  receipt  of 

price.    The  others  are  either  out  of  print  or  may  be  had  of  the  address  given  in  the 

notice. 

THE  HISTORY  OF  CO-OPERATION  in  England;  Its  literature  and  its  advocates. 
By  George  Jacob  Holyoake.  Vol.  1,  6x71/2  Inches,  420  pages,  describing  the 
pioneer  period  from  1812  to  1844.  Published  by  Trubner  &  Co.,  London,  in 
1875.  Vol.  2,  The  Constructive  Period,  1845  to  1878;  8x5  Inches,  502  pp; 
Trubner  &  Co.,  1878.  These  two  volumes  cover  the  whole  ground  of  co-opera- 
tive effort  in  Great  Britain  down  to  1878.  It  Is  Invaluable  to  any  student  of 
the  subject,  and  Is  commended  to  all  who  would  master  the  principles  of 
co-operation.  The  now  venerable  author  is  not  only  the  accredited  historian 
of  the  movement  In  England  but  for  50  years  its  advocate  and  for  much  of 
the  time  its  chief  writer.    Price •85.00 

WORKING  MEN  CO-OPERATORS:  What  they  have  done  and  what  they  are 
doing.  An  account  of  the  artisans'  co-operative  movement  in  Great  Britain, 
with  information  how  to  promote  it.  By  Arthur  H.  Dyke  Acland  &  Benjamin 
Jones.  Pp.  136,  4V2X6  Inches;  London,  1884;  Cassell  &  Co.  This  Is  a  short, 
simple  account  of  English  co-operation,  Its  aims,  its  work,  its  principles— the 
best  and  most  complete  concise  manual  of  English  co-operation. 
Price, Paper  25c,  Cloth  50c. 

THE  HISTORY  OF  CO-OPERATION  IN  THE  tTNITED  STATES.  This  la 
Volume  6  in  the  Johns  Hopkins  University  studies  In  Historical  and  Political 
Science.  Herbert  B.  Adams,  Editor.  It  comprises  six  parts— Co-operation  In 
New  England,  by  Edward  W.  Berals;  Co-operation  in  the  Middle  States,  by 
Edward  W.  Bemis;  Co-operation  in  the  Northwest,  by  Albert  Shaw;  Three 
Phases  of  Co-operation  in  the  West,  by  Amos  G.  Warner;  Co-operation  on 
the  Pacific  Coast,  by  Charles  Howard  Shlnn;  Co-operation  in  Maryland  and 
the  South,  by  Daniel  R.  RandaU.  Pp.  540,  58/4x9Vi:  hiches;  Baltimore,  1888, 
N.  Muriay.    Price *SS.60 

TOE,  HISTORY  OF  CO-OPERATION  IN  ROCHDALE.  Part  1,  from  1844  to 
1857;  Part  2,  1857  to  1877.  In  this  book  George  Jacob  Holyoake  gives  a 
clear  though  rambling  account  of  the  humble  beginnings,  early  struggles  and 
marvellous  developments  of  the  Rochdale  Equitable  Pioneers,  the  originators 
of  the  Rochdale  system  of  co-operation.  In  one  volume,  6x7  V2  Inches  In  size, 
pp.  168.    London,  Trubner  &  Co.    1867  to  1878.    Price, 'f  1.60 

PROFIT  SHARING  BETWEEN  EMPLOYER  AND  EMPLOYE.  By  N.  P.  Oilman. 
With  an  introduction  on  the  Industrial  Problem.  This  book  treats  first  on 
product  sharing  and  the  wages  system  In  Its  various  forms,  then  Introduces 
the  father  of  profit  sharing  (Leclaire),  describes  the  growth  of  his  house  to 
date,  the  spread  of  profit  sharing  in  various  industries,  then  in  agricultural 
transportation  and  distribution,  industrial  partnerNhlps  and  profit  sharing  in 
England  and  America,  history  and  analysis  of  experience  in  profit  sharing, 
winding  up  with  an  argument  in  favor  of  the  system.  Pp.  460,  6x8  Inches. 
Boston  and  New  York,  Houghton,  Mifflin  &  Co.    Price •J1.76 

A  MANUAL  OF  CO-OPERATIVE  DISTRIBUTION  in  Great  BrlUln.  Prepared 
in  accordance  with  a  resolution  of  Massachusetts  Legislature  In  1886,  by 
Carroll  D.  Wright,  Chief  of  the  Massachusetts  Bureau  of  Statistics  of  Labor, 
published  by  the  Bureau  of  Labor,  Boston;  110  pp.,  6%x9  Inches.  This  can 
be  obtained  free  by  sending  a  few  postage  stamps  to  the  above  address. 

A  TREATISE  ON  CO-OPERATIVE  SAVINGS  AND  LOAN  ASSOCIATIONS, 

343 


344  HOW  TO   COdPBBATB. 


incladlnft  building  and  loan  associations,  mutual  savings  and  loan  associations, 
accuinulatiiig  fund  associations,  co-operative  banks,  etc.,  with  Appendix 
containing  laws,  precedents  and  forms,  by  Seymour  Dexter.  New  York, 
D.  Appleton  &  Co.,  1889,  pp.  300,  5x714  inches  This  is  the  most  complete 
practical  manual  on  this  special  branch  of  co-operative  effort,  and  we  heartily 
commend  it.    Price »gl.25 

A  MANUAL  FOR  CO-OPERATORS.  Edited  by  Thomas  Hughes  andK  V.  Neale, 
general  secretary  of  the  Co-operative  Union.  Published  for  the  Central 
Co-operative  Board,  City  Buildings,  Corporation  street,  Manchester;  1888; 
Pp.  266.  This  manual  prepared  at  the  request  of  the  Co-operative  Congress 
held  at  Gloucester,  England,  in  1878,  and  revised  in  1888,  is  a  standard 
authority  in  England.  It  treats  of  the  moral  basis  of  co-operation  and  its 
relations  to  religious  faith,  other  philanthropical  movements,  socialism, 
communism  and  polito-social  effort.  It  then  treats  of  the  economical  basis 
of  co-operation  and  its  relations  to  competition,  current  economic  theories  and 
the  State.  The  practice  of  co-operation  in  distribution,  production,  social 
life  and  as  respects  the  law  is  considered,  also  the  helps  and  hindrances  to 
co-operation  and  the  dangers  to  be  guarded  against. 

A  MANUAL  FOR  BUILDING  AND  LOAN  ASSOCIATIONS.  By  Henry  8. 
Rosenthal.  This  manual  embraces  the  origin  and  history  of  co-operative 
societies,  objects  and  benefits  of  building  associations,  plans  and  methods  of 
organizing  and  conducting  them,  legislation,  constitution  and  by-laws,  forms 
and  descriptions  of  books,  blanks  and  papers,  interest  and  dividend  tables,  and 
a  comprehensive  variety  of  practical  and  useful  information  and  suggestions. 
Pp.  256,  7x9  inches.  Cincinnati,  S.  Rosenthal  &  Co.,  1888.  This  edition  is 
exhausted.  The  second  edition,  of  1891,  will  treat  in  addition  to  the  fore- 
going the  subjects  of  auditing,  serial  plan  and  national  plan.    Price *i?1.60 

THE  CO-OPERATIVE  MOVEMENT  OF  TO-DAY.  The  object  of  this  book  is  to 
explain  the  nature,  growth  and  extent  of  co-operation  in  England  to  outsiders. 
By  George  Jacob  Holyoake,  1891.  Methuen  &  Co.,  Publishers,  18  Bury 
street,  London,  W.  C.    5x71/4,  pp.  198.    Price *gll.00 

THE  CO-OPERATIVE  MOVEMENT  IN  GREAT  BRITAIN.  By  Beatrice  Potter. 
London ;  Swan  Sonnenschien  &  Co.,  1891.    Price, 2s.  6d. 

CO-OPERATION  AS  A  BUSINESS.  By  Charles  Barnard.  New  York,  G.  P. 
Putnam's  Sons,  27  and  29  West  23d  street.  1881.  7x5  Inches;  234  pp.  A 
useful  little  book,  but  unfortunately  out  of  print  and  will  not  be  reprinted. 

THE  ANNUAL  OF  CO-OPERATIVE  WHOLESALE  SOCIETIES,  1891,  gives  a 
splendid  insight  into  the  enormous  business  done  by  the  English  Wholesale 
and  also  by  the  Scottish  Wholesale  (see  Page  30).  Pp.  546,  5l/2x83^  inches. 
It  is  published  annually  by  the  Co-operative  Wholesale  Society,  Limited,  of 
Manchester,  England.  The  edition  is  small  and  the  price  2s  6d  per  copy,  with 
lOd  added  for  postage,  making  it  cost  3s  4d  postpaid,  or  about  80c.  The 
duty  payable  at  the  sender's  local  postoffice  in  this  country  will  be  about  20c. 

THE  REPORTS  OF  THE  CO-OPERATIVE  CONGRESS  cover  in  detail  the 
proceedings  at  the  Annual  Co-operative  Congresses  of  England,  Scotland, 
Ireland  and  Wales.  They  give  not  only  the  papers  and  discussions  in  full  but 
also  the  official  returns  from  each  of  the  co-operative  societies  in  these 
countries  for  the  preceding  year,  and  are  full  of  very  valuable  Information, 
even  to  co-operators  in  this  country.  These  reports  are  published  by  the 
Co-operative  Union  Limited,  14  City  Buildings,  Corporation  street,  Man- 
chester, England.  The  edition  is  limited  each  year,  but  a  copy  could 
probably  be  obtained  from  the  above  address  for  4s  postpaid,  $1. 

THE  PEOPLE'S  BANKS  OF  GERMANY  are  quite  fully  described  in  Richard  T. 
Ely's  article  in  the  Atlantic  Monthly  for  Februarj-,  1881.  More  exact  and 
definite  rules  and  regulations  are  published  in  the  German  language  by  the 
originator  of  the  system,  Schulze-Delltzsch.  His  book  and  the  annual  reports 
of  the  central  association  of  these  banks  are  sold  for  a  reasonable  price  and 


THE   BIBLIOGRAPHY   OF   COOPERATION".  345 

can  be  obtained  from  any  German  bookseller,  among  others  Mayer  &  MuUer, 
61  Franzosische  street,  Berlin,  Germany. 

AGRICULTURAL  CREDIT  IN  GERMANY.  By  Emmanuel  Le  Barbler,  is  a  very 
fuU  treatise  on  the  various  systems  of  co-operative  banking  in  vogue  among 
German  farmers.  It  is  printed  only  in  French,  with  the  title  "Le  Credit 
Agricole  en  Allemagne,"  and  was  published  by  Berger,  Leverault  &  Company, 
No.  5  Rue  des  Beaux- Arts,  Paris,  in  1890.  Fortunately,  however,  the  por- 
tions of  the  work  of  most  practical  interest  in  America  are  intelligently 
summarized  in  Reports  No.  83,  No.  86  and  No.  87  of  the  Statistics  of  the 
United  States  Department  of  Agriculture  at  Washington,  for  April,  July 
and  August  respectively.  No.  83  describes  Rural  Co-operative  Banks;  No. 
86,  The  People's  Banks  of  Germany;  No.  87,  The  Raiffeisen  Loan  Associations 
of  Germany,  a  form  of  agricultural  banks.  As  long  as  the  supply  lasts, 
Interested  citizens  can  obtain  these  reports  free  by  applying  to  Secretary  of 
Agriculture,  Washington,  D.  0. 

PAPERS  AND  TRACTS.  "  The  Sociologic  and  Co-operative  News  "  is  the  rather 
nnlnviting  title  of  a  eight-page  sheet  published  at  York  Harbor,  Me.,  by  Mrs. 
I.  C.  Fales,  secretary  of  the  Sociologic  Society ;  price  50c  a  year.  Mrs.  Fales 
also  furnishes  the  English  Co-operative  News  at  ;5!2.25  per  year,  together  with 
the  following  English  pamphlets  or  tracts:  A  manual  on  systems  of  checks, 
compiled  for  co-operative  societies,  by  the  Central  (English)  co-operative 
board,  25c;  What  Is  meant  by  Co-operation,  by  Benjamin  Jones,  5c;  The 
Growth  of  Co-operation  In  England,  by  G.  J.  Holyoake,  10c;  Co-operative 
Production  In  Great  Britain,  by  J.  C.  Gray,  5c;  Outline  of  Lessons  on  Co-oper- 
ation, 10c;  A  Co-operative  Village  and  How  to  Conduct  it,  5c ;  Association 
Farming,  6c;  The  Story  of  the  Form&tion  of  the  Hlbden  Bridge  Fustian 
Manufacturing  Society,  5c;  The  Organization  of  Labor  (from  Holyoake's 
History  of  Co-operation),  10c;  Equitable  Co-operative  Principles  (The 
Religion  of  the  Future),  25c.  Secretary  Fales  also  furnishes  the  following 
tracts  of  the  American  Sociological  Society  at  3c  each,  or  25c  per  dozen: 
Sociologic  Principles,  The  New  Civilization,  Social  Evolution,  The  Industrial 
Condition  of  the  United  States,  The  Lower  and  Higher  Laws  of  Nature,  The 
Philosophy  of  Co-operation,  Religious  and  Social  Changes,  The  Birth  and 
Growth  of  the  Rochdale  System  of  Co-operation,  Five  Reasons  Why  I  Am  a 
Co-operator,  The  Lower  Law  of  Competition  and  the  Higher  Law  of  Co-oper- 
ation, The  Relation  of  Competition  to  Co-operation,  How  to  Form  a  Co-opera- 
tive Society,  The  Principle  of  Co-operation,  Model  Rules  for  Forming  a 
Co-operative  Society,  Oiir  Position  as  Sociologists  Defined,  What  to  Do  Now, 
Dividend— What  it  Is  and  How  it  Is  Made,  Political  Co-operation,  Studies  for 
Beginners  in  Co-operation— (Part  1  The  Store,  Part  2  How  to  Create  Capital), 
The  Sociologic  Society— Its  History,  Principles  and  Work. 

THE  BUILDING  AND  LOAN  ASSOCIATIONS  have  several  journals  devoted  to 
this  form  of  co-operative  banking.  These  Include :  "  Building  Association 
and  Home  Journal,"  Philadelphia,  Pa.;  Michael  J.  Brown,  629  Commercial 
street;  established  1869;  gl.OO.  Ita  special  quadruple  number  In  December, 
1889,  is  a  complete  manual  of  the  practical  work  of  building  associations, 
which  we  most  highly  commend.  "Building  and  Loan  News,"  New  York 
City;  Monthly,  16  pp.,  Sl.OO,  established  1886;  B.  &  L.  News  Co.,  54  Beek- 
man  street.  "National  Building  and  Loan  Herald,"  MinneaiKtlis,  Minn; 
Monthly,  18  pp.,  i?1.00,  established  1889;  B.  <fc  L.  Publishing  Co.  We  regard 
the  "Nationals"  as  something  to  be  avoided.  "Our  Homes,"  New  York 
City;  Monthly,  12  pp.,  50c;  established  1888;  Wm.  H.  Randall,  28  Center 
street.  "Worker  and  Shareholder,"  Palmyra,  N.  Y;  Monthly,  4  pp.,  50c, 
established  1889;  F.  G.  Crandall.  "Co-operative  News,"  Cincinnati,  O; 
Monthly,  12  pp.,  gll.OO,  established  1890;  S.  Rosenthal  &  Co.,  203  Vine 
Street.  Also  publish  books,  blanks,  etc.,  used  by  corporative  l)anks.  "  Co-op- 
erative Building  and  Loan  Association  Bulletin,"  San  Francisco,  Cal; 
Monthly,  8  pp.,  Jl.OO,  established  1889;  John  O.  Leibert,  410  Sansomo 
Street.  "  American  Building  A.ssorlation  News,"  Chicago,  111;  Monthly,  iii) 
pp.,  ifl.OO,  established  1883;  A.  Coddington,  156  Washington  street 


INDEX, 


[The  Abbreviation  C  stands  for  Co-operation  or  Co-operative.] 


Adaptation  of  C,  tlie  generallO,  35,  36. 

AdvantaKes  of  C,  20,  21,  22. 

Advertisements,  end  of  book. 

ARencv,  the  C,  7. 

Allecran,  Mich.,  C.  Store,  the  105-114, 
274-277 :  A.  Stegeinan,  105,  109,  112, 
A  stift'  back  bone  needed,  110;  a  sub- 
stantial success,  105 ;  by-laws  of,  274- 
277;  comparison  with  the  Rochdale 
plan,  113;  its  weakness,  114:  just  how 
the  store  is  managed,  110;  lessons  of 
its  success,  109 ;  light  expenses  ex- 
plained, 107;  money  on  deposit,  100; 
not  the  Rochdale  system,  106;  one 
useful  lesson,  112;  profits,  106;  rec- 
ords summarized,  107;  some  strong 
pointsof  success,  111;  tried  by  fire, 107. 

American  Live  Stock  Commission  Com- 
pany, 222-227 :  by-laws,  223 ;  commis- 
sions, 224;  details  of  shipments,  223; 
divisions  as  to  membership,  225:  ex- 
pelled from  the  Chicago  live  stock  ex- 
change, 224;  its  headquarters  and 
branches,  223;  its  unparallelec'  suc- 
cess, 226;  men  who  make  this  success, 
226;  opposition  to,  224;  progress,  bus- 


Author's  note  to  reader,  4. 

Bank,  how  to  start  a  C,  184. 

Banking,  C,  10,  178-206,  330-332:  ad- 
dresses of  C.  banks,  330-332 ;  a  strong 
point  in  favor  of,  183;  avowed  pur- 
pose of  these  associations,  180;  con- 
trasted with  the  savings  bank,  180, 
181;  Dr.  Schulze-Delitsch,  201,  202, 
204;  economy  of,  181;  Ely,  Prof.  Rich- 
ard T.,  200;  extent  of  system  in  Ger- 
many, 201 ;  German  C.  credit  ruinous, 
200.  201,  202,  204;  Grangers'  bank  of 
California,  192-198;  how  the  new  sys- 
tem operates,  180 ;  how  to  start  a  bank, 
184;  its  management  by  depositors, 
180;  model  by-laws  of  the  Berean  B. 
&  L.  A.  of  PhUadelphia,  185-192;  na- 
tional association  not  hidor^ed,  182; 
Patrons'  C.  bank  of  Olathe,  Kan.,  198; 
people's  banks  or  credit  imions,  198- 
206;  possibilities  of  C.  savings,  179; 
some  noteworthy  examples,  178;  suc- 
cess of,  178;  vs.  pawn  shops  and  pri- 
vat«  brokers,  201;  warehouse  system 
in  Russia,  196;  workers  benefited  by 
their  savings,  184. 


iiiess  and  profltJ,  224;  shares  and  prof-  i  Banking  features  of  a  0.  society,  the, 


its  222. 

Angell,  Thomas  H.,  86,  88,  96, 100. 

Appendix,  254. 

Arlington  C.  store,  the,  37-78:  allow- 
ance for  depreciation,  47;  announce- 
ments, 70;  auditing  the  accounts,  65; 
a  useful  hint,  126;  banking  features, 
52:  blank  application  for  member- 
ship, 59;  blank  form  of  receipt,  Gl; 
by-laws,  40-46;  cash  registering  ma- 
chine, 60;  Charles  Watnwrlght,  Sii; 
clerk's  statement,  72;  comment  on 
clerk's  statement,  73;  directors  mcet^ 
ings,  62;  educational  ffid,  48;  fre- 
quency of  meetings,  51;  general  regu- 
lations, 52;  George  Dewhirst,  74,  78; 
George  Hartley,  65 ;  growth  of  the  as- 
sociation, 55;  how  it  started,  37-40; 
how  the  Arlington  has  grown,  76;  how 
the  store  is  run,  57;  how  to  become 
a  member,  58-70;  its  motto,  9;  James 
A.  Coghlln,  57;  officers,  49;  other 
points,  49;  President  Speed,  62,  70; 
quarterly  meeting,  76;  quarterly  state- 
ment, 68;  records  of  a<lvisory  commits 
tee,  63;  sinking  fund,  46:  summary 
book,  66;  taking  stock,  64:  trading 
with  other  stores,  75;  value  of  by-laws, 
54;  weakest  n<)lnt  in  the  Arlington,  76; 
William  D.  Hartshorue,  38;  William 
Whitman,  38 ;  work  of  the  directors,50. 

Auditing  accounts,  65. 

Author's  acknowledgment,  6. 


52, 181. 

Beet  sugar  factories,  128. 

Benefits  of  C.  open  to  all,  the  18. 

Bibliography,  343-346. 

Brook  farm,  32. 

Building  and  loan  associations,  178-192. 

Business  and  profit  of  C.  societies,  27. 

By-laws,  the  value  of,  54. 

By-laws  for  a  C.  bank,  185-192;  cheese 
factory,.  155;  creamery,  160;  factory, 
234;  productive  association,  139;  soci- 
ety (modeled  after  the  Rochdale  Pio- 
neers), 257-273;  of  successful  Ameri- 
can societies,  2  >  4-305. 

California  Fruit  Union,  the,  215-221, 
293-298:  agents'  commissions,  219; 
benefits  of  a  contract,  219;  bj'-laws, 
293-298 ;  collection  of  claims  for  losses 
against  railroads,  219;  copy  of  con- 
tract between  union  and  selling  agen- 
cies, 217 ;  division  of  profits,  220;  great 
success  of  the  effort,  220;  how  bene- 
fits are  paid  for,  219 ;  how  the  business 
is  conducted.  217 ;  how  the  shares 
were  subscribed  for,  215;  main  thing 
to  regret,  221;  manager's  salary  and 
expenses,  how  met,  215;  organization 
of  Dranch  unions,  215;  securing  a  bet- 
ter system  f  marketing,  215;  state- 
ment for  1890,  221. 

Cash,  Eneas,  89,  96. 


Cash  registering  machine,  the,  60. 

346 


INDEX. 


347 


Cattle  marketini?,  C,  221-227:  how  to 
beat  the  packers'  combine,  221;  the 
American  live  stock  commission  com- 
pany, 222-227. 
Centi-alizatlon  of  capital,  how  prevent- 
ed, 49. 

Cheese  factory,  the  C,  153-156:  extent 
of  the  system,  153;  regulations  for  a 
cheese  factory,  155;  two  general  sys- 
tems, 153 ;  where  run  under  contract, 
154;  wherein  like  the  C.  creamery, 
155. 

Chicago  milk  shippers'  association,  the, 
168. 

Clerk  of  the  C.  store,  the,  49. 

Commercial  morality,  a  new  means  of, 
16. 

Common  idea,  the,  23, 

Competition  vs.  C,  8, 11. 

Congress,  a  C,  252. 

Conrad,  Prof.  199. 

Corporation,  the  C,  19. 

Contents,  table  of,  5. 

Creamery,  the  associated,  145-153:  a 
great  saving  effected,  145;  a  practical 
success,  146;  benefits,  145;  C.  cream- 
eries in  N.  K,  146;  creameries  in  tlie 
South  and  West,  147;  creamery  vs. 
dairy  butter,  146;  how  it  is  managed, 
147:  its  practicability,  146;  Michigan 
method,  148;  model  by-laws  and  rules, 
150;  reasons  for  failure,  147. 

Credit,  the  perils  of,  16, 17. 

Credit,  the  proper  use  of,  198. 

Credit  unions  (see  People's  banks). 

Dairyhig.  C,  143-158,  328-330:  address- 
es of  C.  creameries,  328-330;  ad- 
journed meethiK,  144 ;  appointing  com- 
mittees, 144;  best  way  to  proceed, 
144;  just  what  it  is,  143:  legal  perfec- 
tion eiii|ihasizcd,  144;  location,  how 
di'cMid,  144;  profits  of,  143;  spread 
of  tlK?  <-r<-amery  system,  143;  the  as- 
sociated creauierv,  145-153;  the  first 
neces.slty,  143 ;  what  to  avoid,  145. 

Delaware  fruit  exchange,  the,  211-215, 
a<lvantages,  213;  how  It  is  operated, 
213 ;  liow  its  defects  could  liave  been 
guarded  against,  214;  principal  reason 
for  its  lack  of  progi-ess,  214;  weak 
points,  214;  why  organized,  211. 

Destiny  of  C,  the,  253. 

Dewhirst,  George,  74,  78. 

Directors,  inisiness  of,  60. 

Directory  of  C.  enterprises,  311-333. 

Distribution,  C,  10,  32-126. 

Dividends  on  purchases,  25, 77. 

Early  period,  the,  23. 

Economy  of  well  used  credit,  200. 

Education  of  ('.,  10,14. 

Education  required,  13. 

Educational  fund,  48. 

Essential  points  In  C,  80. 

Exrliange,  C.  14. 

Exchanges,  farmers'  (see  Farmers'  and 
People's  exchanges). 

Failure,  an  Instructive,  78. 

Failure,  causes  of,  81, 132, 137, 147, 170. 

Failures,  C,  18,  23,  32,  34,  50,  78,  81, 
147, 170. 

Failures,  productive,  137. 

"Fake"  enterprl.ses,  19. 

Farm  atui  town  mutual  Insurance  com- 
panies, 160-177 :  average  cost  for  each 
ll.OOO  insurance,  163,  165;  careful  In- 
spection necessary.  169 ;  cr)st  and  sav- 
ings in  the  Michigan  mutuals,  166; 
general  principle  of  all  these  nmtuals, 


161;  how  to  organize,  174;  life  insur- 
ance, 177;  live  stock  insurance,  177; 
Michigan  farm  nmtuals,  165;  Michi- 
gan model  code  of  laws,  161;  mistakes 
of  co-operators,  169;  necessity  of  con- 
fidence, 175;  object,  160;  officers  and 
meetings,  176;  Pennsylvania  the  first 
State  to  adopt  the  plan,  160;  perils  of 
C.  insurance,  167 ;  progress  of  the  sys- 
tem, 163, 164;  savings  of  C.  insurance, 
166;  soiiie  conspicuous  facts,  167;  suc- 
cess in  Massachusetts  and  Connecticut, 
161;  successful  and  unsuccessful  ex- 
periences, 170-174;  system  In  other 
States,  160;  system  practiced  by  com- 
munity sects,  161;  unbusinesslike 
management,  170;  where  the  system 
is  unlawful  or  unknown,  160-161. 

Farmers'  Alliance  exchanges,  324. 

Farmers'  Alliance  exchange  of  Texas, 
the,  34,  207. 

Farmers*  Alliance,  the,  18, 34, 207. 

Farmers'  and  People's  Exchanges,  207- 
240:  California  Fruit  Union,  215-221; 
C.  cattle  marketing,  221-227:  Dela- 
ware Fi-uit  Exchange,  211-215;  good 
accomplished  Ijy  the  old  grange  sys- 
tem, 207;  Hamnionton  (N.  J.)  Fruit 
Growers'  Union,  227-240;  Kansas  Alli- 
ance exchange,  208-211;  system  adopt- 
ed by  Farmers'  alliance  exchanges, 
207;  the  people's  exchange,  240;  their 
purpose  and  success,  207. 

Farmers'  movement,  the,  8. 

Farmers'  organizations,  7. 

Farming,  C,  127. 

Fire  Insurance,  C,  159-177,304-310,325- 
328 :  constitution  and  by-laws,  304-310; 
contrasted  with  old  line  stock  compa- 
nies, 159;  farm  an<l  town  mutual  in- 
surance companies,  160-177;  helpful 
hints,  325;  names  and  addres.so,s  of 
mutual  fire  Insurance  companies,  325- 
328 

Florists,  C.  among,  321. 

Frauds,  C,  19. 

Furniture  workers  co-operators,l33-lJ,7. 

Future  of  C,  the,  252-254:  advisability 
of  a  right  start,  252;  Immediate  work, 
252;  its  star  In  the  ascendancy,  254; 
nationalism  and  socialism,  2.''i2;  ob- 
taining of  proper  legislation,  253;  pro- 
IK)sed  C.  congress,  252. 

Grangers'  bank  of  California,  the,  192- 
198,301-304:  by-laws,  301-304;  direct 
loan  to  farnurs,  193;  extent  of  the 
bu.slness,  197;  government  aid  vs.  self- 
help,  195;  how  It  has  i)rogrcssed,  192; 
how  the  business  is  done,  196;  jirincl- 
pal  business,  194;  trifling  lo8.ses  In- 
curred, 194. 

Hamnionton,  N.  .T.,  Fruit  Growers'  Un- 
ion, the,  227-240,  290,  292:  a  compar- 
ative statement,  232;  annuul  state- 
ment, 233;  a  typical  farmers'  ex- 
change, 227;  bookkeeper  and  cashier, 
236;  buildings  and  e<|uipment,  230; 
certificate  of  association,  229;  credit 
sales,  232;  flally  bulletin,  237,  238; 
evolutlcm  of  this  society,  227;  explan- 
atory notes,  232;  good  iiolnt-.-.  240; 
how  the  ('.  store  was  started,  227;  lis 
growth,  230,  231;  lessons  of  It  all.  239; 
men  at  the  hea<l  of  the  enterprise,  239; 
new  arrangement  with  commission 
merchants,  227;  opimslflon  t<i,  236; 
other  weak  points,  240;  profits  aiio 
dividends,  230;  rules  and  by-laws,  290- 


348 


HOW  TO  COOPERATE 


292;  satisfaction  of  members,  237; 
shareholders  and  capital,  229;  shli)- 
plng  department,  237 ;  store  and  ship- 
ping accounts,  232,  233;  store  man- 
aitement,  234;  the  first  union  In  1867, 
227 ;  the  new  store,  231 ;  trial  balance 
book,  236;  weakest  point  in  the  whole 
affaU-,  240. 

Harlem  (N.  Y.),  women's  exchange,  the, 
250,  251. 

Hartley,  George,  65. 

History  of  C,  the,  23-36. 

Honesty  required  In  C.  effort,  16. 

How  to  start  a  C.  store,  125. 

Illustrations,  list  of,  6. 

Individuality  of  belief,  how  maintained, 
15. 

"  Industry,  the  Peace  of,"  22. 

Insurance,  C,  10,  163-177:  careful  in- 
spection necessary,  169;  how  to  organ- 
ize, 174-177 ;  mistakes  of  co-operators, 
169;  j)erlls,  167;  progress,  163;  sav- 
ings, 163 ;  successful  and  unsuccessful 
experiences,  170-174;  unbusinesslike 
management,  170. 

Insurance,  comparative  cost  of  C.  and 
stock,  163, 165. 

Inventory,  the  taking  of  an,  64. 

Johnson  County  C.  store  at  Olathe,  Kan., 
114-120,  277-282:  a  notable  success, 
114;  branch  stores,  116;  by-laws  and 
rules,  277-282;  building  and  trade, 
116;  dividends  paid  to  purchasers, 
118;  employes,  120;  H.  C.  Llvermore, 
114, 120;  how  the  farmers  have  pros- 
pered, 118;  Increasing  the  wealth  of 
the  State,  118;  profits,  117;  progress 
of  the  concern,  115;  Rochdale  plan 
followed.  115;  summary  of  reports, 
117    W.  H.  Toothaker,  114. 

Joint  stock  vs.  C,  12,  52. 

Kansas  Alliance  Exchange  company, 
the,  208-211,  298-301 :  business  run  by 
the  farmers,  210;  capital  and  member- 
ship, 208:  cash  advances  on  grain,  210; 
constitution  and  by-laws,  298-301 ;  di- 
rectors of  the  exchange,  210;  division 
of  profits,  208;  how  the  business  is 
managed,  209;  how  the  trading  is 
done,  208;  improved  freight  rates, 
how  secured,  210;  line  of  goods  car- 
ried, 209;  other  sales  (than  binding 
twine)  made  on  commission,  209;  pros- 

Eectlve  enlargement,  209;  sales  of 
inding  twine  in  1891,  209;  storing 
grain  in  elevators,  210;  strong  point 
made  of  economy,  209;  warehouse  re- 
ceipt and  advances  thereon,  210. 

Knights  of  Labor,  18. 

Lat)or  associations,  7. 

Labor  the  foundation  of  C.  success,  16. 

Laws  regarding  C.  organization,  the,  18, 
20,  46,  334-342. 

Life  insurance,  177. 

Lisbon  Falls  (Me.)  C.  store,  312-314. 

Llvermore,  H.  C,  114, 120. 

Live  stock  Insurance,  177. 

Loans  and  their  i)rlvilege8,  204. 

Lyons  C.  store,  the,  83-97, 282-287:  addl- 
tions  made,  87 ;  building  purchased,86; 
by-laws,  282-287;  cash  payments,  88; 
Charles  H.  Henle,  97;  Eneas  Cash,  89, 
96,  139;  further  Insight,  03;  Henry 
Maass,  97;  how  It  started,  84;  Its  his- 
tory, 83 ;  J.  G.  Lolllck,  96 ;  kind  of  men, 
96;  opposition  provoked,  86;  8.  A. 
Sleight,  96;  secretary's  report,  89; 
shareholder's  certificate,  136;  strong 


points  of  Its  success,  88:  Thomas  H. 
Angell,  86, 88, 96, 100;  trade  and  cred- 
its, 87. 

Meetings,  frequency  of,  51. 

Michigan  farm  mutuals,  165, 166. 

Milk  comi)anIes,  C,  156-158:  the  distri- 
bution of  milk,  156;  the  Onondaga 
(N.Y.)  association,  157-158;  the  Spring- 
field (Mass.)  asso.,  158. 

Mismanagement,  results  of,  18,  23. 

Mistakes  of  co-operators,  the,  169. 

Monopoly  vs.  C,  11. 

Mutual  nre  insurance  companies  (see 
Farm  and  Town  Mutual  insurance 
companies). 

Mutual  insurance,  the  general  principle 
of,  161. 

Nationalism  and  socialism,  252. 

Nature  of  C,  7. 

New  England  milk  producers'  union,  the 
158. 

Objection  to  C.  trading  answered,  an,  12. 

Object  of  C,  the  great,  17. 

Onondaga  Milk  Association,  the,  157, 
158:  amount  of  milk  handled,  158: 
how  originally  formed,  157:  Its  great 
success,  157;  limits  of  peddlers,  157; 
requirements  of  members,  157. 

Organization,  the  required,  18. 

Over-valuation  of  farm  insurance,  169. 

Owen,  Robert,  23. 

Patrons'  0.  bank  of  Olathe,  Kan.  the,  198. 

Patrons  of  Husbandry,  the,  18,  32,  105, 
121. 

People's  banks,  the  198-206 :  capital  vs. 
Interest  returns,  200;  cash  dealings 
insisted  on,  199;  cash  dealings  vs.  use 
of  credit,  198 ;  extent  of,  200, 201 ;  how 
the  banks  are  operated,  202;  how  to 
start,  184,  205 ;  loans  and  their  privi- 
leges, 204;  losses  and  profits,  how  di- 
vided, 204;  members  and  manage- 
ment, 203;  members'  authority  over 
the  managing  board,  203;  necessity  of 
a  substantial  share  capital,  204;  proper 
use  of  credit,  198;  some  usual  banking 
features  adopted,  204;  usefulness  of 
the  reserve  fund,  204;  well  used  credit 
econouiv,  200. 

People's  Exchanges  (see  Farmers'  and 
People's  Exchanges). 

PliUaaelphla  Industrial  0.  society,  the, 
78. 

Philadelphia  women's  exchange,the,250. 

Politics  vs.  C,  14. 

Principle,  the  true,  24. 

Private  trading  vs.  C,  12. 

Production,  C,  10,  29,  31, 127-158:  ap- 
plication to  Eastern  farmers,  130;  beet 
sugar  fa<;torIes,  128;  C.  cheese  factory, 
158-156;  C.  dairying,  143-158;  C.  fac- 
tories, 133-142;  C.  farming,  127;  C. 
milk  companies,  156-158;  danger  to 
be  guarded  against,  128;  Dr.  Gilman's 
book,  138;  homcsteadhig  a  township, 
128;  how  the  new  settler  can  obtain 
its  benefits,  128;  its  complication,  127; 
model  by-laws,  138;  other  productive 
enterprises,  138;  productive  failures, 
137;  profit  sharing,  138;  Rochdale 
idea  in,  127;  success  in  Germany,  128: 
use  of  a  stock  corporation,  130;  what 
Nebraska  farmers  are  doing,  130; 
working  men  C.  producers,  131. 

Productive  efliort,  failure  in,  132. 

Productive  enterprises,  other,  138. 

Productive  failures,  examples  of,  137. 

Profit  sharing,  138,  204. 


IKDEX. 


349 


Profits  how  divided,  13. 
Proifress  of  C.  In  England,  25,  27-31 ; 
Scotland,  30;  United  States,  32-36. 

Province  of  C,  9-22. 

Quarterly  statement,  the,  68. 

KeU^ion  vs.  C,  14. 

Kochdale  system,  the,17, 25, 35, 257-273. 

Rogers,  J.  S.,  124. 

St.  Louis  Furniture  Workers'  Associa- 
tion, 133-137:  by-laws,  134;  dividends 
and  wages,  133;  factory  rules,  136; 
how  shares  of  stock  are  taken  up,  133; 
Its  humble  start,  133;  members  and 
their  homes,  133 ;  sharing  In  the  losses 
and  profits,  134. 

Science  of  C,  the,  10. 

Socialism,  Christian,  9. 

Sovereigns  of  Industry,  the,  33. 

Si)riugfleld  (111.)  women's  exchange,  the, 
250. 

Springfield  (Mass.)  C.  MUk  Association, 
the,  158:  amount  of  milk  handled: 
average  returns  to  farmers;  compared 
with  Boston  and  New  Tork  prices; 
saving  to  farmers. 

Spirit,  the  true  C,  9. 

Starting  a  C.  store,  18, 125. 

Stegenian,  A.,  105,  109, 112. 

Stores  and  societies,  C. :  Allegan,  Mich., 
105-114;  Arlington,  at  Lawrence, 
Mass.,  37-78;  Bingham  county.  Idaho, 
317;  brazil,  Ind.,  320;  Bristol,  Eng., 
29;  Butte  county,  Cal.,  322;  Clark 
county,  Wa.sh.,  315;  Cowley  county, 
Kan.,  321;  Davison,  Mich.,  315;  Eau 
Claire,  Wis.,  320;  English  Wholesale, 
28;  Foxcroft,  Me.,  317;  Johnson 
county,  Kan.,  74,  114-121:  Kingston, 
Mass.,  315;  Lebanon,  Ct.,  318;  Leeds, 
Eng.,29;  Lewistou,  Me.,  33,317;  Linn 
county,  Kan.,  314;  Lisbon  Falls,  Me., 
33,  312;  Lyons,  la.,  83-97;  Monte 
Vista,  Cal.,  319,  320;  New  Bedford, 
Mas.s.,  314;  Norwav,  Me.,  316;  River- 
side of  Maynard,  322,  323 ;  Rochdale, 
24-20;  San  .lose,  Cal.,  318;  Scottish 
Wholesale,  .30;  South  Paris,  Me.,  316; 
Texas  at  Galveston,  121-125;  Trenton, 
N.  J.,  97-105;  Worcester,  Mass.,  311, 
312. 

Store,  tlie  C.  a  grand  success,  77. 

Success  In  C,  causes  of,  80,  82. 

Systems  of  C,  two,  13. 

Terms  employed,  the,  19. 

Texas  Alliance  Exchange,  the,  34. 

Trade  discounts,  33.  35. 

Texas  C.  store,  the,  121-124,  287-290:  by- 
laws, 121 ;  compai  ativc  statement,123 : 
dividends,  how  Ulvldfd,  121;  general 
remarks,  123;  how  owned  ana  opera- 


ted, 121;  how  the  business  is  done, 
122;  its  building,  121;  its  conspicuous 
success,  121;  J.  S.  Rogers,  124;  mutu- 
al fli'e  insurance  company,  124;  Presi- 
dent A.  J.  Rose,  122;  progress  and 
profits,  122 :  rules  and  by-laws,  287-290. 

Toothaker,  W.  H.,  114. 

Trade  unions,  7. 

Trenton  (N.  J.)  C.  store,  the  97-103:  a 
big  dividend  payer,  97;  annual  com- 

Sarison,  103;  annual  statement,  103; 
;enjamin  Holland,  99,  102 ;  by.laws— 
how  they  differ  from  Arlington's,  98; 
coal  and  wood  profits,  100;  dividends, 
102,  103;  Frank  Glenn,  99;  how  It 
grew,  99;  how  it  surpasses  Arlington, 


98;   members,  99,  101;   opposition 

proi 
reserve  fund,  102;  sharing  profits  with 


met  with,  99;  property  owned 


;   oppos 
^ned  by. 


101; 


shareholders,  98. 

True  system,  progress  of  the,  35. 

Trust  vs.  C,  n. 

Universal  application  of  C,  7. 

Union  milk  companies,  158. 

Useful  hint,  a,  126. 

What  C.  is  and  is  not,  9-22. 

Wholesale  Society's  Annual,  the,  30. 

Women's  exchanges,  241-251,  332-334: 
address  of  women's  exchanges,  332- 
334;  advantages  in  country  as  well  as 
city,  251;  articles  remaining  unsold, 
246;  attractive  room  desired,  243;  be- 
ginning of  a  small  exchange,  245 ;  bal- 
ance sheet  of  successful  exchanges, 
250;  business  manager,  243;  consign- 
ors' risks,  246;  duties  of  the  adjudi- 
cating committee,  245;  entrance  fee, 
242;  express  and  mall  charges,  246; 
Helen  Campbell,  241;  history  of,  242; 
how  to  pack  cake,  248 ;  how  to  start, 
242;  how  to  start  goods,  246;  invoice 
of  contents,  247;  lunch  room  or  res- 
taurant, 243,  244;  model  rules,  251, 
252;  nece.sslty  of  a  uniform  (luallty, 
247 :  New  York  exchange,  242 ;  organ- 
ization and  officers,  244;  organizers  vs. 
consignors,  242;  specialties  most  prof- 
itable, 248;  percentage  on  sales,  245: 
proi)er  rules,  251;  i)rovi8ions  called 
for,  241:  rules  covering  consignments, 
246,  247;  two  sets  of  duties,  242;  un- 
salable articles,  246;  use  of  a  special 
label,  249;  what  articles  will  pay  best, 
247. 

Working  men  C,  producers,  131. 

Worklngmen's  Protective  Union,  the,32. 

Worcester  (Mass.)  C.  stores,  311,  312: 
protective  union,  312;  Sovereigns', 
311;  Swedish  Mercantile,  812. 


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Those  who  are  undertaking  Co-operative  Dairying  in  any  form  what- 
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